By Diane Madigan
Independent Special Writer
In Visteon’s bankruptcy settlement, Visteon agreed to negotiate with Van Buren Township in good faith to determine the amount of the shortfall with respect to the bonds and make a non-tax payment — pay in lieu of tax, or PILOT — to the township and to assist the township in making timely payments on the bonds.
– Taken from former VBT Supervisor Paul White’s reading of the agreement at a September 2012 LDFA meeting
After the sale of the Grace Lake complex to Sovereign Partners, the assessed value of the property that Visteon was paying taxes on was greatly reduced. This became a concern to the Van Buren Township Local Development Finance Authority (LDFA) and in September 2012 a resolution was passed to encourage the VBT Board of Trustees to reopen negotiations with Visteon, and to file suit within 21 days if settlement discussions were not fruitful.
Apparently a letter was written but was never sent and the Independent has been unable to obtain any documentation. Linda Combs, who at that time was VBT’s newly elected supervisor, said there was no letter to Visteon on her desk when she came into office and she knew nothing about it.
At the September 2012 meeting former Supervisor Paul White said, “They were called and we did not receive a return call.”
On Oct. 16, 2012, the township board approved hiring the law firm of Clark Hill to assist the township’s corporation counsel in moving forward with issues related to Visteon Corporation.
Attorney Kaveh Kashef from Clark Hill has written a letter to Visteon and met in closed sessions with the VBT board and the LDFA.
To date, the township has spent $46,410 with Clark Hill. Documents obtained through the Freedom of Information Act show the charges coming 71% from the General Fund budget and 29% from Water and Sewer budget, which according to Treasurer Sharry Budd, is the norm for general counsel. Treasurer Budd, said Clark Hill fees will now come from the LDFA budget.
Clerk Leon Wright said the $41,528 already paid to Clark Hill will be returned to the General Fund and Water and Sewer budgets and be taken from the LDFA budget.
During Visteon’s Chapter 11 bankruptcy proceedings, the township and Visteon entered into an agreement and mutual release, dated Jan. 25, 2010. At the time of the agreement both parties understood and acknowledged that when comparing projected tax revenues with the township’s obligations under the bonds, a financial shortfall would occur.
Kashef’s Sept. 9, 2013 letter to Visteon’s President and CEO Timothy D. Leuliette stated: “The township has completed a comprehensive review of its obligations under bonds, as well as its projected tax revenues, and is confident not only that a shortfall is inevitable but that the shortfall will occur in 2018.”
In Kashef’s correspondence, a very-detailed, cash-flow analysis prepared by the PFM group was included, as well as a copy of the agreement. On behalf of the township, Kashef requested the parties schedule a meeting within 30 days to negotiate in good faith the amount of the shortfall.
The letter closed with the statement, “If Visteon ignores our request or fails to negotiate in good faith, we will have no other option but to seek relief through judicial means.”
The township had not received a response by the Oct. 8 LDFA meeting at which time the LDFA unanimously recommended that the VBT Board instruct its legal counsel to file a petition to reopen the Visteon bankruptcy and initiate other legal action by Nov. 30, 2013.
Supervisor Combs agreed, saying this item would be discussed at the next Monday’s (Oct. 14) work-study session, but no mention of the issue was made at that meeting.
A Sept. 10 letter from Kashef to Supervisor Combs was received asking to meet in closed session to consider their demand letter to Visteon, the PFM review, and moving-forward strategy.
The letter also advised that it (the letter) and its attachments not be shared with persons other than the board prior to the board meeting. It also advised that the attorney-client privilege is waived if the confidential document is shared with persons who are not in the attorney-client relationship.
The disclosure of the Sept. 10 letter in response to a Freedom of Information Act request seems to have jeopardized the legality of a future closed-session with Kashef.