Van Buren Twp. again files suit against Visteon

Since $639,157 had to be borrowed from Van Buren Township coffers to pay the shortfall on Visteon bonds in October, the township finally can claim damages and so on Monday it filed suit, again, against Visteon.
It finally is “ripe” for adjudication.
The township had filed suit in 2017, but both Wayne County Circuit Court and Appeals Court found in favor of Visteon and dismissed the case and in March, so did the Michigan Supreme Court.
Both the Circuit Court and Appeals Court agreed that VBT can refile the complaint when a shortfall actually occurs.
Members of the Van Buren Township Local Development Finance Authority noted at their Sept. 10 meeting that the shortfall in the money available to pay the Visteon bonds would occur in October.
VBT Supervisor Kevin McNamara said if Visteon has not made a payment to make up the estimated $639,157 bond shortfall, “We will send them a letter shortly after Oct. 1.”
The full faith and credit of the township is behind the Visteon bonds and the LDFA will not have the funds to pay the bond payment in full. The township has agreed to cover the difference to make sure the payment is made on time and then the LDFA will pay the township back in the future, with interest.
The township had money set aside for this payment and a plan to reinstate the law suit against Visteon, once it can show the claims are “ripe” for adjudication.
In 2003, the township issued $28,199,656.35 in bonds to assist Visteon with infrastructure in the construction of Visteon Village. Final payment on the Authority bonds is in 2032.
After Crain’s Detroit Business published a story online on the new law suit Tuesday morning and referred to a news release, the Independent requested the news release from the township and finally got it just before deadline for this week’s paper.
The news release, reportedly written by the township’s attorney Kaveh Kashef, states: In its complaint, the township asks the court to find that Visteon Corporation breached its contract with the township. In that contract — a settlement agreement was reached between the parties while Visteon was mired in bankruptcy — the township gave the global auto parts supplier massive property tax concessions in exchange for Visteon’s commitment to make payments in the future that would be necessary to avoid a default on the $28 million in bonds that the township’s Local Development Finance Authority (LDFA) had previously issued to help Visteon develop its world headquarters, “Visteon Village.”
As originally structured, Visteon’s property tax payments would have been sufficient to pay off the bonds; after the property tax concessions, a future shortfall was inevitable, which is why the township conditioned the concession on Visteon’s assistance in covering the future shortfall.
The news release continues: With the property tax concessions from the township, Visteon emerged from bankruptcy and has enjoyed financial success. In 2018 alone, it reported $164 million in net income. Now, however, Visteon has rejected the township’s request for payment under the agreement, denying that it has any obligation to assist the township cover the shortfall on the bond payments.
In the news release, Supervisor McNamara is quoted: “We tried to responsibly manage financial responsibilities by bringing this shortfall to Visteon’s attention when we had certainty of the shortfall amount and the date of its occurrence. For years, the township told Visteon the shortfall would occur in October 2019. For years, Visteon has been telling the township and the courts that the township’s projections are hypothetical or speculative. Well, it’s turned out exactly as we projected, and Visteon is still stonewalling us, leaving taxpayers to pick up the tab on the shortfall. We’re working on our residents’ behalf to prevent that from happening. It’s in the best interest of our taxpayers to put this case in front of the court. We are hopeful that the court will make Visteon finally keep its promises to our community.”
In replying to the Independent’s request Tuesday to talk to McNamara on the lawsuit, McNamara sent an email: “As this is very important to the community, I am reluctant to say anything to [sic] that can be used in future lawsuit filings. This is our official press release. For a while it will be my policy to ‘Not comment any further on this on-going lawsuit.’ I am deferring to the attorneys at this key juncture in this suit.”
In another comment, McNamara wrote: “I dropped the hint that it was going out soon at our last meeting. I actually only found out last night that they filed yesterday. Sorry.”
Van Buren Charter Township vs. Visteon Corporation may be reviewed at Case #19-016479-CB.
A status conference on the case has been set for 8 a.m., March 9, in Business Court before Judge Edward Ewell, Jr.