Editorial: LDFA contributes $4.5 million, delays VBT catastrophe

At a special meeting on Aug. 18, the Van Buren Township Local Development Finance Authority voted to contribute $4,516,000 to the refinancing of some of the Visteon bonds. This move pushes VBT’s shortfall on the bonds out a year farther than expected – from 2018 now to 2019, after that April’s bond payment.
That’s when the LDFA and the township, which pledged its full faith and credit in paying off the bonds, is responsible for paying for the bonds without having enough money on hand.
The Aug. 18 move to contribute the money was not something the LDFA wanted to do, but advisors said the IRS would look askance at them selling tax-exempt bonds when so much was in the kitty.
There were questions about how this would affect VBT’s law suit against Visteon, since any real damages to the township now wouldn’t come until 2019.
But the IRS rules were clear. Either add the money to the refinancing or forget the refinancing. Since refinancing is expected to save about $1 million or so, the LDFA went forward.
Visteon had requested that VBT’s law suit be moved from Bankruptcy Court in Delaware to Wayne County and the township agreed to have it proceed closer to home. We’ll all be watching to see what happens next. If Visteon chips in to help pay the bonds, VBT taxpayers won’t have to shell out as much.