Squeezed Out – by Al Harris of Richmond BizSense

http://www.richmondbizsense.com/2011/06/22/squeezed-out/

A prominent developer will sell his stake in the company his father founded under pressure from colleagues looking to force him out.  Richmond real estate developer Hank Wilton agreed Tuesday to sell his remaining shares in the Wilton Companies to an investment entity that told him it would foreclose on his house and force his wife into bankruptcy if he did not comply.  Wilton declared personal bankruptcy in September, no longer able to carry stalled residential real estate projects.  Under the agreement, a group named Mountain Investments LLC will pay $1.47 million for his shares, or $630.91 per share.

Behind Mountain Investments is Rich Johnson, the current president, CEO and chairman of the Wilton Companies, and Rodney Poole, the corporate counsel for the Wilton Companies.

Wilton said that Mountain Investment acquired a debt against him and his wife that was held by the Bank of Hampton Roads as leverage to force him to sell his shares.  “Either I had to sign it exactly the way they wanted or they were going to pull the deal and put my wife into bankruptcy, and I didn’t want to do that to her,” Wilton said.  Johnson did not return several calls requesting comment. Poole declined to comment, citing client-attorney privilege.  The shares that Wilton is selling to Mountain Investments include voting shares with special veto powers. Johnson and Poole hold the only other voting shares of the Wilton Companies, but Wilton’s veto power gave him control over company decisions.  “I think they want control, and they don’t want to have to ask me to do anything,” Wilton said.

As part of the agreement, Wilton also agreed to step down from the Wilton Companies board of directors. He will continue to work part-time for the company for the next six years with a salary of $50,000.  “I’m out and they’re in, and that’s where it stands,” Wilton said.  The Wilton Companies owns more than 25 shopping centers and more than 4,000 apartments, mostly in the Richmond area. It was founded in 1945 by Wilton’s father, E. Carlton Wilton. About seven years ago, the company was divided into shares and sold to investors, which included Wilton, Johnson, Poole and about 20 others.  Johnson and Poole, together with other unidentified investors, formed Mountain Investments in May and acquired a judgment from the Bank of Hampton Roads against Wilton and his wife, Cindy Wilton, in the amount of $6.4 million, according to Wilton and corroborated by court documents.  Wilton said that Mountain acquired the note for $3.4 million, or about half of the original amount.  He said he took that loan to pay off other short-term debts. The collateral shares were not enough to cover the loan after Wilton defaulted. The bank placed liens on the Wiltons’ home on River Road in Goochland and their North Carolina beach house.

Mountain Investment told Wilton they would foreclose on both properties and as a result force his wife into bankruptcy if he didn’t sign the agreement. By doing so, Wilton satisfied the debt held against him by Mountain Investments.  Wilton let his shares go for what he said is a very low price. The shares were valued at $1,250 three years ago and will likely be worth more several years from now after the economy recovers, Wilton said, adding that the company had to cuts its 7 percent dividend down to less than 2 percent last year. It’s just above 2 percent now, Wilton said.

Wilton’s financial troubles began several years ago when the residential real estate market tanked. He filed for bankruptcy in September 2010 with liabilities totaling $93.2 million, $28.1 million of which was owed to secured creditors mostly consisting of banks that included First Capital, Bank of Hampton Roads, Village Bank and Wells Fargo. Wilton said the case will be converted to a Chapter 7 liquidation after the agreement with Mountain is approved by the bankruptcy court next month.  Wilton said the funds from the sale of his shares would go toward paying off the unsecured creditors in his bankruptcy case.  The Wilton Companies board has two other members, Sam and Bryan Kornblau of Eagle Commercial Realty.  Their attorney, Buddy Allen with LeClairRyan, did not elaborate on the situation.  “We are in the dark, quite frankly, as to who Mountain Investments is,” Allen said.  Allen confirmed an investigation is underway to determine who else is a part of the entity, aside from Johnson and Poole.  “We have a cooperative effort with Rodney Poole and the Wilton Companies to get more information. It’s a voluntary process, and God willing we will be able to find out, for starters, exactly who Mountain Investments is,” Allen said.

As for Wilton, he said that after the bankruptcy he plans to work as a consultant and possibly pursue a couple of small developments every couple years or so with other developers.  And he’ll honor his part-time employment agreement with Wilton Companies.  “I’ll go and if they need me to do something, I’ll step up and do it,” Wilton said. “When all is said and done, I guess we’ll have to bury the hatchet.”

Al Harris covers real estate for BizSense. Please send news tips to Al@richmondbizsense.com.

Highway Junk Mail in Our Future?

This Thursday night, June 16th, 7 pm, the Hanover Planning Commission will hold a public hearing regarding the pros/cons of allowing large, digital signs, roughly the size of King Dominion’s electronic sign, to litter Hanover County’s I-95 corridor. If approved, it will affect the Lewistown Rd., King’s Dominion, and Old Ridge / Hickory Hill Road areas.

The Coalition for Hanover’s Future invites you to join us in opposition to the proposed amendment for the following reasons:

  • No studies on traffic, safety, light, noise (that’s right, they’re noisy) or environmental impacts have been completed.
  • Static or not, huge electronic signs or “TVs on sticks” distract motorists on busy roads, especially I-95.
  • Emphasizing safety, Scenic America warns of “lingering looks.” A study conducted by the National Highway Traffic Safety Administration sets a distraction threshold of two seconds, beyond which the chances of car crashes increase “significantly.”

The owners of Winding Brook development (at Lewistown Rd.) requested an amendment that would allow a 100+ acre development such as Winding Brook to erect two large, digital signs – visible from I-95 – with a minimum separation of less than a half mile (2,000 ft.) The proposed signs would be in addition to other permitted signs and billboards. The height of the proposed signs would be 125 feet tall and the electronic display cannot change with a frequency of less than 60 seconds. Light intensity would also be limited during the day and night.

One citizen wrote: “Hanover has long stood by its ordinance and resisted attempts by special interest groups to undo our very reasonable regulations. If the County were to open us up to pressure from the sign lobby and their friends, we would not only be on a slippery slope, we would end up at the bottom…. If you think allowing a 12-story sign in one place and not for the business next door because they don’t meet the criteria will end there, you are only kidding yourselves. You do not know the political power that the sign and billboard industry can exert when they see an opening. The business knew the sign ordinance when they made the decision to locate in Hanover. The County has a responsibility to its non-business citizens as well as to the business community, and the current regulations have the proper balance.”

On the grounds of safety and quality of life, this proposed amendment should be rejected. The County has a sign ordinance that works well. We urge you to write, call, or e-mail your representative on the Planning Commission (click on link in the left column) before its scheduled June 16thmeeting. Citizens may also comment at the Public Hearing.

To read the full staff report and proposed amendment click here.

These signs are directly counter to interests in public safety. Check out the facts and statistics from Scenic America.

Please join us at the Public Hearing this Thursday, June 16th at 7 pm!

Suburban Walk and Talk

Suburban Walk & Talk in Mechanicsville

in collaboration with

Partnership for Smarter Growth
and Tricycle Gardens

How is Bon Secours Memorial Regional Medical Center in Mechanicsville
becoming a catalyst for inclusive planning, increased connectivity and walkability?

June 9th, 5:30 – 7:30 pm

Bon Secours’ Memorial Regional Medical Center in Mechanicsville

Register today, space is limited!

Features a panel discussion, Q&A, complimentary refreshments from Ellwood Thompsons, local Grayhaven Wine for purchase, and a tour of the Bon Secours Memorial Regional Medical Center in Mechanicsville including an edible garden. 

Opening Remarks:

  • Jason Smith, Healthy Communities Liaison, Bon Secours Virginia, welcome 

  • The Honorable Deborah B. Winans, Chairman of the Board of Supervisors, and Mechanicsville District Representative, on the importance of community planning

Presenters:

  • Trip Pollard, Senior Attorney, Southern Environmental Law Center,on regional context and overview of series and health impact of community design 

  • Dougal Hewitt, Senior Vice President for Mission, Bon Secours Virginia, on Bon Secours charrette processes and committment to healthy hospitals and communities

Panel Participants:

  • Tommy Thompson, Village of Mechanicsville Association, on the community’s efforts to improve walkability and connectivity in Mechanicsville;

  • Invited, Hanover County Planning Department Representative, on the role of the County;

  • Pattie Bland, Chair, Coalition for Hanover’s Future, on the role of the citizen in planning processes;

  • Laura Lafayette, Richmond Association of REALTORS, on market trends and the importance of reinvesting in our suburban communities.

Additional Participants:

  • Will Snyder, Tricycle Gardens, on the Healing Garden;

  • Larry Hagan, GRTC Transit System, on GRTC Transit System’s role;

  • Joe Vidunas, Department of Public Works, Hanover County, on the  processes to finance improvement projects.

ABOUT BON SECOURS’ MRMC CAMPUS AND THE SURROUNDING AREA:  Memorial Regional Medical Center, a 70-acre medical campus, is preparing for its next collaborative, community-based planning  and design charrette. This method for community planning is being used to increase social integration, community benefit, environmental responsibility, and economic sustainability.  The planning process will look at campus design, as well as give address concerns voiced in the community about access to public spaces, bicycle and pedestrian safety, public transport, affordable housing, land use, and other environmental and sustainability concerns that impact community health.

 

Please join us to walk, talk, and explore

the health benefits of where and how we grow!