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untanglingwebs
El Supremo
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Just about three weeks ago Wendy Johnson told council that the money allocated to the Flint Area Enterprise Community (FAEC) during the annual consolidated plan was finally going to happen. They hoped it would be in time to have assistance in place to help residents file for their earned income tax credit. The FAEC has received no funding for about 7 months and laid off all of their employees except one. That one was servicing loans previously made and putting together board packets for the FAEC and the Economic Devellopment Corporation. Now that employee has been laid off.
The Board of Directors for FAEC had recently had an inservice training on the obligations of a board, their Duty of Care and their Duty of Loyalty. Five members quit and some in the community say it was because they could not perform their duties because of interference from the walling Administration, namely from Greg Eason and Wendy Johnson.
As a result the FAEC cannot meet and conduct business because they do not have a quorum. The five that resigned:
Gloria Jones
Addie George
Sally Woodbeck
Mary branch
Gary Metzger
Wendy Johnson was named by Walling to the board as a voting member. The board requested a HUD determination as to a conflict of interest. The real issue is under Michigan Law and the law against Incompatible offices. Because Johnson is the one who controls the money coming from the city to the FAEC, then her position on the board is subordinate and may be incompatible.
The board is said to object to demands from the administration including who they hire as an Executive Director and a Loan Officer. It has been said that this organization has never received this much interference from any previous mayor, including Williamson.
The decisions of the board will not be heard in court unless it is alleged they violated their Duty of Care, their duty of loyalty or made an irrational decision. They must make their decisions with the care that an ordinarily prudent person would in a similar circumstance. They must base their decision making with a reasonable belief that they are acting in the best interests of the corporation. They have a duty not to waste the corporate assets by overspending on property or employment services.
The Duty of Loyalty involves no self interest violations. An example of this is when Flint West Village was going under and a Board memeber was allowed to purchase three parcels of land for the benefit of Kettering, whom the board member represented. The bankruptcy court was outraged and kettering was forced to pay more money for the proprties. The board member did not act in good faith for the benefit of the corporation and most likely violated the boards standards of conduct.
I believe the board would have incurred a liability if they had acted on the administrations demands. Their money comes from federal sources and has stringent rules attached to it. They have their own Standards of Conduct and bylaws. They had to follow their conscience and act in a capacity to prevent allegations of misconduct and possible violations of law if they ignored their duty of oversight. |
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Mon Feb 14, 2011 6:09 pm |
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untanglingwebs
El Supremo
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Jean Conyers, formerly of the Metropolitan Chamber of Commerce, recently resigned from the Economic development corporation. It has been alleged that a former loan officer inappropriately sent a letter to a loan applicant saying a loan would be approved prior to the loan application going to the EDC board. Conyers was furious and believed the reputation of the board was tarnished in some way by this being allowed to happen. Allegations are some in the Walling administration ordered the letter to be sent.
Conyers has enjoyed a reputation for being an honorable person and business woman. The loss of her services will be felt at the EDC, which is short on the number of required directors. |
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Mon Feb 14, 2011 7:05 pm |
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insider
F L I N T O I D
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What? Mr. Eason micro-managing something? There is no way this story could be true because he would never micro-manage!  |
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Tue Feb 15, 2011 7:03 am |
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untanglingwebs
El Supremo
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The wannabe "spin doctors" are trying to figure out how to deal with the resignation of so many directors. Word is they want to say the group resigned because their terms were expired.
Trouble is that is the case with so many boards and in most instances bylaws or ordinance allows them to remain until the seat is filled.
Johnson is falsely accusing some members of encouraging the others to resign. from the community is the word that Johnson has disrespected some of these board members during the meetings. These individuals have all been involved in some form of community service for years and are aware of the rules for being on a board.
Mybe the issue is those members of the Walling administration that continue to say these volunteers are too old an need to be replaced with young people. Yong peoplr that is that don't have the experience dealing with politicians and refuse to be FLIM-FLAMED. |
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Tue Feb 15, 2011 12:21 pm |
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untanglingwebs
El Supremo
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| I wish I had been at council when Wendy Johnson verbally attacked Gary Metzger who was standing in the audience. Attorney Brenda Williams was also nearby and is said to have stopped this outrage and thoroughly chastised Johnson. I have seen Attorney Williams in action and she has a sharp, quick mind that does not tolerate foolishness in politics. |
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Fri Feb 18, 2011 8:22 am |
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untanglingwebs
El Supremo
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The decision is still pending on whether Flint and the State must pay back the money from the Flint Area Investment Fund (FAIF) that was misused. The Money came from the federal government to the stste and passed through to Flint. When CCDC stopped allowing monitoring and the Emergency Financial Manager refused to demand monitoring of the fund , the problems were not found. Add to that the State's failure to monitor and the stage was set for abuse.
After the initial monitoring the state immediately wanted repayment of the money. Forensic auditors came in to fill in the blanks. The federal government has not signed off and the whole fiasco is in limbo.
This board is not going to repeat the mistakes of the FAIF board, They are not going to be compromised. |
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Sun Feb 20, 2011 8:17 am |
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untanglingwebs
El Supremo
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The law firm of Simen, Figura, & Parker, represented the Flint Area Enterprise Community (FAEC).
During the investigation involving the misuse of funds by Community Capital Development Corporation (CCDC), the fiduciary agency for the Flint Area Investment Fund (FAIF), the law firm oversaw an attempted forensic audit. CCDC had thwarted the attempts of Nancy Jurkiewicz ,Director of FAEC, to monitor the FAIF records for nearly three years. There had been no audits during that time and the state oversight was lacking.
The Emergency manager, Edward Kurtz had refused to act, and Jurkiewizc received no help until Mayor Williamson intervened on her behalf. During a more than month long review of the loans, it was noted that documentation was missing, and many irregularities existed.
Meeting were held with the board of FAIF, the lawyers and the State of Michigan. On February 21, 2007 the attorney corresponded with Margo Yaklin, Grant Administrator,Empowerment & Zoning, Enterprise Communities, Michigan Department of Human Services. (Formal Request to State of Michigan Monitoring Visit) |
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Thu Jul 07, 2016 12:27 pm |
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untanglingwebs
El Supremo
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"You have asked us,as legal counsel for the Flint Area Enterprise Community,Incorporated ("FAEC"), to submit a report following our review of the outstanding loans of the enterprise funds made by the Flint Area Investment Fund ("FAIF")on behalf of the FAEC. The loan files whch we were able to secure and which were missing many required documents were reviewed by attorney William Delzer of this firm. Mr. Delzer prepared the initial draft of this report.He is no longer with our firm,however, having left to assume a position as in-house counsel for a privae business, but i have reviewed his work and have, with some revisions, finalized this report. With that background,we provide the following report onvarious delinquent loans deemed uncollectible.
RRR University Pizza
One of several loans hat exceeded the $100,0000 cap set by the FAIF bylaws. The original loan made was for $165,000, although the request in April 1999 was for a $100,000 loan,10 year tern and a 5 year balloon. Citizens Bank was to make a $65,000 loan (Citizens was represented on he board) which never occurred. FAIF added an addendum for the $165,000 request. It was implied the Citizens Loan did not proceed because the borrower had a concealed weapons charge. |
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Thu Jul 07, 2016 12:48 pm |
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untanglingwebs
El Supremo
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Although it was noted there was an "overall lack of collateral" the loan went through. The $165,000 loan was approved despite it being a violation of the bylaws.
"Loan documents do exist from the June 30,1999, closing;these documents include a Business Loan Agreement, Security Agreement, UCC Financing Statement,Mortgage and Promissory Note. The Business loan Agreement, although fairly standard, is missing one important item. Under Section 5.1-Events of Default, there is no mention of bankruptcy.Although there is no language specifically found in the Business loan Agreement which discusses bankruptcy, Letter F of the Promissory Note signed on June 30, 1999, by (the borrower) states that the filing of a Petition for Bankruptcy, voluntary or involuntary, by or on behalf of the maker,which petition shall not be dismissed or withdrawn within five days of the date the same is filed shall constitutue default."
However, the borrower filed bankruptcy three times. There were so many multiple bankruptcies that FAIF couldn't identify hat one of their borrowers was in default. |
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Thu Jul 07, 2016 1:09 pm |
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untanglingwebs
El Supremo
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While the UCC financing statement was filed with the state, it was not updated and therefore it lapsed. This resulted in the loss of approximately $107,309.00, the appraisal value of the equipment.
Allegedly,the home of the borrower's parents was foreclosed and that was the property encumbered by the loan with a fourth mortgage. When the Sheriff's sale was held on July 6, 2005,all junior liens were extinguished. |
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Thu Jul 07, 2016 1:14 pm |
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untanglingwebs
El Supremo
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OK Industries-Joe Giacalone
A loan in the amount of $225,000 was made to OK Industries and Joseph Giacalone on May 4, 2001. The indebtedness of $225,000 was to be repaid to the FAIF when a Section 108 loan was made to the borrowers by the City of Flint. It is alleged that the credit of Mr. Giacalonen and the value of the assets were falsified on the loan application and the Section 108 loan. Unfortunately, the FAIF completed a Business Loan Agreement and the only security for the $225,000 promissory note was a personal guaranty from Mr. Giacalone. |
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Fri Jul 08, 2016 6:54 am |
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untanglingwebs
El Supremo
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"The City of Flint has obtained a judgement against OK Industries and Joseph Giacalone for the amount of the section 108 loan. OK Industries has appealed that judgement. Going forward, the only remaining issue is one of collection."
Two properties were sold pursuant to a Circuit Court order. FAEC is unsure of the status of the remaining properties because OK Industres and Giacalone :had multiple loan agreements with multiple different loan agencies within the City of Flint".
"There is a combination of lack of institutional control by the FAIF in giving this loan without proper security as well as loaning funds to be used to pay back other loans. The Giacalone's were able to "rob Peter to pay Paul" while understanding that all of this money came from the same source- The City of Flint."
NOTE: The creator of this multiple loan scheme was Alex Thomas. According to news stories nothing has been paid back on either loan. Also named in the lawsuit was Dan Robin. OK Industries filed a counter lawsuit against the City of Flint. |
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Fri Jul 08, 2016 7:07 am |
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untanglingwebs
El Supremo
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3. Service Cleaners
There were two loans given to this property, both of which exceeded the $100,000 cap as set by the bylaws.
1) November 1999 for $110,000
2) October 20,2000 for $150,000
The only security for the loan was a mortgage on the property located on 3219 N. Saginaw. The mortgage was foreclosed and FAEC holds the property through a quit claim deed.
The records indicated the remaining $150,000 of outstanding debt was to be reported to the IRS as earned income, but it is unknown if this occurred.
"It is important to note the lack of the FAIF's institutional control with regard to this loan. There are multiple allegations that a 1998 Chevrolet Astro Van was purchased by the borrower, Ms. Lewis, in 1999, and ultimately assigned to the FAIF in April 2002 . The allegations surfaced around the Executive Director Harold Hill, converting this Astro van to his personal use despite the fact that FAIF bylaws do not allow for corporate ownership of vehicles. It is not understood whatever happened with this vehicle or where the funds ultimately ended up for the purchase of the vehicle by either Mr. Hill or any third party." |
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Fri Jul 08, 2016 7:26 am |
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untanglingwebs
El Supremo
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| The disposition of the equipment used in the dry cleaners is also not mentioned. |
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Fri Jul 08, 2016 7:28 am |
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untanglingwebs
El Supremo
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Dave's Towing
"A loan in the amount of $140,000 ($40,000 in excess of the FAIF bylaws) was givven to Dave Wojahn of Dave and Terri's Towing for a vehicle towing business. A personal guaranty was executed by David Wojahn of Dave and Terri's Towing as well. Dave Wojahn had been a part of a successful towing company, Dave and Terri's Towing, which was incorporated through Teri Wojahn. He was planning on retiring and offered to sponsor Lane brothers, Inc., two minority brothers previously employed by Dave Wojahn in the purchase of his business. Allegedly he was to have a 51% or greater interest remaining in the business.
As a result, all of the loan documents previously mentioned were created for dave Wojahn and Dave's Towing. The business ultimately failed and the loan was defaulted on. FAIF filed an action for claim and delivery as well as a money judgement against Dave Wojahn and Dave and Terri's towing. There was a lack of control and due diligence on the part of FAIF as it appears that title to the vehicles was at all times held by Terri Lynn Enterprises, Inc. and not by Dave Wojahn not Dave and Terri's Towing, or even the Lane Brothers Towing, Inc. Ultimately, the title to the wreckers and other vehicles within the corporation owned by Dave and Terri's Towing, which is now dissolved, was transferred to Lane Brothers,Inc. Litigation ensued, but the result of that litigation it is unknown at this time. |
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Fri Jul 08, 2016 7:46 am |
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