VBT passes resolution authorizing litigation against Visteon Corp.

At its regular meeting on April 21, the Van Buren Township Board of Trustees voted unanimously to authorize litigation against the Visteon Corporation, directing the law firm of Clark Hill to draw up the paperwork.
When pressed for a reason, VBT Supervisor Linda Combs said, “Visteon has not bargained in good faith.”
The township is seeking enforcement of the Settlement Agreement with Visteon that agrees to reimburse the township for bond payment shortfalls, which now are expected in 2018.
The resolution explains how the Local Development Finance Authority (LDFA) was established in 2002 to, among other things, encourage the construction of Visteon’s world headquarter in VBT.
Visteon and the township entered into various agreements, including a Development Agreement, that were intended to get Visteon to locate its headquarters and operations in the township.
Under the terms of the Development Agreement, Visteon was contractually obligated to invest sufficient funds into Visteon Vilalge to insure sufficient tax revenues would be generated to repay certain township-issued bonds in their entirety.
In 2006, as tax increment revenues from the Visteon Village fsiled to meet the original projects, the LDFA and the township acted to restructure the current interest bond portion of the Series 2003 to alleviate projected shortfalls.
About May 29, 2009, Visteon and a number of related entities filed for bankruptcy protection. The township filed a general unsecured claim in the bankruptcy due to, among other things, Visteon’s failure to meet the commitments made.
During the bankruptcy, Visteon and VBT settled their various pending disputes and entered into an Agreement and Mutual Release, dated jan. 25, 2010.
As part of the Settlement Agreement, in order to alleviate the township’s concerns that the reduced assessed value of Visteon Village would result in a shortfall under the baond, the agreement included Visteon’s commitment to insure no shortfall would occur.
The township hired Public Financial Management Inc., one of the nation’s foremost public finance investment advisers, to conduct a cash flow analysis for the township.
PFM ran several projections tied to various assumptions and in its September 2013 report concluded that under each and every scenario run by PFM a payment shortfall occurred.
On Sept. 9, 2013, the township through its counsel delivered the PFM report to Visteon with a Demand Letter. In the 18 months since, Visteon has engaged in an ongoing effort to avoid the obligation under the Settlement Agreement.
In a related action at the April 21 meeting, the board voted unanimously not to contribute additional funds towards the bond refinancing of the LDFA Tax Increment Refunding Bonds, Series 2015.
Supervisor Linda Combs had supported a $4 million contribution to reduce the interest on the $17 million bonds, but the rest of the board was against it. She changed her vote to give a united front in the decision.
She said she believed the $4 million would show in the court case against Visteon that the township did everything it could to solve its shortfall problem.
In other business at the April 21 meeting, the board:
• Held a public hearing on the Venetian, Jeanette and Dewitt Road Improvements Special Assessment District and then reopened the public hearing later in the meeting to make sure all the residents’ questions were answered. The board voted to create the SAD and set the second public hearing for May 19 and to tentatively set the payments for five years;
• Approved the Mero Act Right of Way permit extension to AT&T for a five-year term, ending July 31, 2020;
• Approved the reappointments of Dr. Gerald Graf and Carl Pedersen to the Water and Sewer Commission with terms to expire May 31, 2017;
• Approve the lawn maintenance contract with Gonczy’s Property Maintenance from 2015 through 2017 with options to renew in 2018 and 2019;
• Approved the Alliance of Downriver Watersheds amended bylaws;
• Approved special land use approval for Sadek Properties for Dunkin’ Donuts for a drive-through restaurant at the BP Service Station, 10950 Belleville Road;
• Listened to the Civic Fund honor winners in its Earth Day poster contest; and
• Heard Fire Chief Dan Besson introduce three new paid-on-call fire fighters, Kody Gazdag, Bradley Gudith, and Matthew Jovanelly. Chief Besson said he has ten more in the hiring process.