VBT goes into mediation in law suit against Visteon over bonds

At the March 14 meeting of the Van Buren Township Local Development Finance Authority, LDFA vice chairman Doug Peters gave an update on the township’s lawsuit against Visteon Corporation in Wayne County Circuit Court.
Supervisor Kevin McNamara said on June 6 the township will go into voluntary mediation and the two sides agreed on a federal judge they both trust to do the mediating. Both sides will share the cost.
Peters, an attorney, said both sides will give information to retired Judge Gerald Rosen, who was Chief Judge of Federal Court in Michigan’s Eastern District and was part of the Detroit bankruptcy.
“This is the best chance for Visteon to settle,” said Peters. “If not, I recommend we go to trial.” He said Visteon does not appear to want to settle.
Supervisor McNamara said Peters, McNamara and others will be locked in a room with others for the mediation. He said three members of the board will be there. He said he wants to make sure the board has enough votes for a decision, but not too many sitting together that would be an unlawful quorum.
When Peters asked if the legal bills are being charged to the LDFA, McNamara said they were.
The March 14 meeting featured the Informational Meeting required under Public Act 57 of 2018. Two such meetings are required each year.
The 2022 Synopsis of Activities also is required to be placed on the LDFA website.
The LDFA was formed to finance and construct eligible public improvements for Visteon Village which was completed in 2004. The LDFA established a development plan and tax increment financing plan which identified the improvements, estimated the costs of the improvements and estimated the amount of tax revenue the authority would capture based on the proposed improvements.
In order to finance the construction of the public improvements, the LDFA issued $28 million in bonds to cover the costs of the improvements and those bonds were guaranteed by the township’s ability to tax.
The primary focus of the LDFA at this time is the payment of the debt obligations as a result of those public improvements.
Due to economic conditions the LDFA will not capture sufficient tax revenue to cover scheduled debt service and due to the shortfall, which occurred on Oct. 1, 2019, the LDFA was loaned $700,000 on Sept. 4, 2019 by the township to assist with the bond payment.
As of Dec. 31, 2022, the township has loaned the LDFA $6,175,000 and accrued $100,058.85 in interest on the loan for a balance of $6,275,058.85.
The LDFA and township continue to pursue legal action against Visteon because of the shortfall. It is Wayne County Circuit Case #19-016479-CB before Judge Edward Ewell, Jr.