By Diane Madigan
Independent Special Writer
Van Buren Township Supervisor Linda Combs gave the VBT Local Development Finance Authority an update on legal matters concerning VBT bond payments for the Visteon project that the township will be unable to cover starting in 2016.
At the May 14 LDFA meeting, Supervisor Combs said the inflated price of the property to sell the bonds in the beginning was too high and, “That’s why we are where we are.”
She said her update was based on a phone conference she had with Kaveh Kashef, lead counsel from Clark Hill law firm.
She said Clark Hill has merged with Thorp, Reed and Armstrong and the merger will bring another 320 attorneys to Clark Hill.
Supervisor Combs said attorney Kashef assured her that VBT will have continuity of attorneys and will have the same attorneys working on this that the township has had from day one.
Combs said she brought the concerns of LDFA member Doug Peters to attorney Kashef and Kashef said he will be furnishing the committee with bills to date and a summary of progress made.
“The timeline is hard to predict because of the variables involved with getting responses from letters sent to people,” Combs said. “They are not targeting Ford in any of the litigation because it had nothing to do with the Visteon issue.”
Combs continued with the update stating that Sovereign, which bought the property from Visteon, has no relationship with Ford, Visteon or GE.
The refinancing issue is not a done deal yet so she said Kashef hesitated on commenting on the rate, the principal, or the term.
There is no legal malpractice action pending against VBT’s former attorney Richardo Kilpatrick about the Visteon bankruptcy deal because any case would be weaker and not possible, Combs said.
As far as the inflated price to sell the bonds in the beginning, Combs said Kashef agreed with Peters that the appraisal was too high and “that’s why we are where we are.”
Combs said Kashef agreed to meet with the LDFA in closed session on June 11.
LDFA chairman Michael Dotson thanked Combs for the update and reminded her and the township that the timeframe is very crucial on this and that the LDFA hopes to move forward with all expeditiousness. Timing is of the essence with this, he emphasized.
Combs said she wasn’t at liberty to discuss the timeline, but it will be discussed in the closed session.
“Can we assume that the letter has still not gone out?” Peters asked.
“Yes, you can assume that,” Combs replied. “It has not gone out.”
That exchange obviously referred to a letter mentioned by Combs in February when she said Kashef is targeting a letter to Visteon to begin the negotiation process. The LDFA had asked previously that such a letter go out in October or November, at the latest.
In February, Combs said Clark Hill told her they weren’t ready for litigation yet and are still gathering information.
At the end of the May 14 LDFA meeting, Carl Johnson asked from the audience if the April 1 bond payment of $500,000-plus has been paid.
Arthur Mullen, interim Director of Planning and Economic Development, said he was sure it was and Combs said she would have heard about it if it had not been paid.
Johnson said that, typically, that is discussed at the LDFA meetings and Combs said she would get confirmation from Treasurer Sharry Budd.
Chairman Dotson said he believed it would be appropriate that payment and upcoming payments be shown on future agendas for questions and discussion and Combs agreed.
LDFA member Peters, who is also an attorney, asked Combs for a copy of the LDFA development agreement, “the original agreement that was signed.” He also thanked Combs, on the record, for the first three years of LDFA minutes that she had provided to him.
“You want the agreement when the LDFA was originally formed, correct?” Combs asked and Peters replied, “That is correct. It is the agreement between LDFA and Visteon.”
Editor’s Note: 2013 payments are due April 1 and Oct. 1 and will total $953,546.25. In October 2015 the interest rate increases from 4.25% to 5%. Until 2016, bond payments are being made from the Visteon bankruptcy settlement. In 2016 that money will be gone and the payment will more than double to $2,198,652.50. In 2032 the township will make the final bond payment of $3,050,000, bringing the total cost of the Visteon bonds to $55,988,988.07 on property that is not owned by the township.