(05/25/2002)
The Charleston Gazette

Clay Business Group, Bank Fight Over Filcon Site Both Have Claims On Bankrupt Company

Friday May 24, 2002

By Scott Finn
Staff Writer

A fight is brewing between a Clay County development group and a local bank over who will get nine acres of land owned by a defunct filter-making company.

Earlier this year, Filcon Inc. owner Manfred Kuentzer defaulted on a $255,000 loan from the Clay County Bank. Two weeks from now, bank officials plan to sell his property on the courthouse steps to recoup their losses.

But earlier this week, members of the Clay County Business Development Authority, or BDA, voted to try to stop the auction, with a court order if necessary.

They gave the land to Kuentzer two years ago, and now they want it back.

The bank has a deed of trust saying they get the land if Kuentzer defaults on his loan. But BDA board member Norman Wilson says Kuentzer had no right to put up the land as collateral in the first place.

"He couldn't do that," Wilson said, "and whoever took that as collateral went out on a limb somewhere."

The property on W.Va. 36 isn't much to look at. Yellow caution tape surrounds the entrance. A creek has washed away a temporary bridge. A half-completed industrial building sits roofless on the other side.

But the property and some equipment is all Filcon has left. The company ceased making filters earlier this year after two years in Clay.

Kuentzer insisted Wednesday that Filcon was still in business, even though the sheriff had his equipment hauled away Tuesday to cover other bad loans.

At one point, Kuentzer promised to employ up to 300 people in Clay County. At its height, the business employed only five.

He began making filters in 2000 in the old Rite Aid building in Clay. Local development officials promised to help him build a factory on the W.Va. 36 property so he could expand.

The Clay County Business Development Authority bought the land for $90,000, then gave it to Kuentzer in February 2001 on the condition he create at least 15 jobs by the end of this year.

One month later, he used the property to secure a $255,000 loan from the Clay County Bank. A clause in his original agreement with the BDA seems to imply that Kuentzer couldn't do that.

"Filcon cannot cause a lien or encumbrance to be put on the property without BDA prior consent," it reads. BDA board members said they never gave Kuentzer permission.

The Filcon collapse may have contributed to recent losses at the Clay County Bank. It lost $264,000 in the last quarter of 2001, according to the FDIC - the fifth-highest loss of any state bank.

Longtime bank president J.D. Morris resigned late last month. Bank officials said the resignation had nothing to do with the losses.

There's supposed to be a modern bridge connecting W.Va. 36 to the industrial site. State taxpayers spent almost $10,000 to buy 20 steel beams for the bridge.

Clay County received $50,000 from the Legislature to help prepare the site and build a road and bridge. Kuentzer promised to build the plant with his own money.

In an April 2001 letter from Filcon, Kuentzer told state officials the beams would be used "to build a road access with a bridge across the creek."

Today, no bridge exists. Instead, Kuentzer said the beams were used as trusses for the roof.

"I used them on the building. I thought it was all one big project," he said.

Kuentzer had a shaky business record before he came to Clay County. Between 1996 and 1999, he pleaded guilty to writing bad checks, racked up $700,000 in judgments against him and his businesses, and was extradited to Germany to face fraud and misappropriation charges.

Still, he managed to get more than $300,000 in taxpayer assistance, including grants, loans and pledges.

Of all the players in the Filcon debacle, only one appears to have made money - the family of Clay lawyer Wayne King. They sold about six acres of the land to the BDA for $65,000.

King helped the Clay County Bank make the loan to Kuentzer, which allowed him to start his building. Now, he is helping the bank foreclose on the property.

According to property records, he transferred the land to his parents more than 20 years ago, and his son Christopher was added to the deed in 1989.

BDA board member David Derby said that King's involvement in the deal could make it harder for the bank to win their case in court.

"Wayne King is involved in all these papers. He wrote the deed. Now he's employed by the bank to do the foreclosure, so I think that may help us," Derby said.

King said he was not involved in the negotiations between BDA and his family.

"That was between my mom, dad, my son and the county," he said. "I did do the deeds.

"I'm glad they bought it from my parents," King said. "Somebody could still go in and develop it."


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