VIM operator cites debt, regulatory pressure in wood recycler's downfall
Posted: 05/17/2012 at 1:15 am
By: Tim Vandenack
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$PHOTOCREDIT_ON$Firefighters battle the March 27, 2003, VIM fire.$PHOTOCREDIT_OFF$
Truth File Photo By J. Tyler Klassen
VIM Recycling President Ken Will makes a statement to the press regarding the fatal accident at the recycling facility Wednesday, May 6, 2009. (Truth Photo By Jennifer Shephard)
$PHOTOCREDIT_ON$VIM Recycling president Ken Will makes a statement to the press in 2009 regarding the fatal accident at the recycling facility.$PHOTOCREDIT_OFF$
Truth File Photo By Jennifer Shephard
VIM Recycling, a waste-wood recycling facility, dumps wood chip into a mulching machine Thursday, April 14, 2011. (Truth Photo By Adrienne Barnett)
A Recycling Works truck drops a load of scrap wood at the old VIM plant 9/24/2010. The scrap will be ground into mulch when the plant resumes operation. (Truth Photo By J. Tyler Klassen)
It was 2007, and buyers seemed to be snapping up the animal bedding and mulch the wood recycler produced from wood scraps supplied by area manufacturers.
“Everything was starting to really go,” said Ken Will, president and co-owner of VIM. “We looked like we were finally going to make things turn.”
Then came a devastating fire June of that year at VIM and suddenly, prospects at the wood recycling firm — now defunct and operated by a new owner — withered. The dust explosion that caused the massive blaze killed a worker and injured another and led to increased scrutiny by regulators. Lawsuits followed — from the Indiana Department of Environmental Management, the Indiana Department of Homeland Security and neighbors — and some of the legal action continues to this day.
“Unfortunately, the accident happened and things went the other way,” Will said.
Ultimately, VIM and K.C. Industries, the firm that owned the land where VIM sat, accumulated around $7.6 million in debt, due largely to rebuilding costs after the fire, according to Will. And now, Will said he's just trying to scrape by, hoping one day to pay off the considerable debt at VIM that remains, let alone a looming $150,000 fine.
He does “odd jobs” like cutting lawns, he said, using his work time to muster a “clear thought” about how it all seemed to go awry.
“It's very hard to find a job when those (lawsuits) are hanging over your head,” he said.
It's been a bumpy ride for VIM.
A suit filed against the firm by irate neighbors, who complain that dust and odor emissions from the facility pose a health threat, continues in U.S. District Court in South Bend. At the same time, the company faces a whopping $150,000 fine in a separate case filed by IDEM in Elkhart Superior Court 1.
The bulk of the news involving the company of late has come from court proceedings. Speaking by phone this week, though, Will offered another take on the process and insight into the apparent heavy debt — and regulatory pressure — that eventually did in VIM.
After the fire, after spending millions to rebuild, after the lawsuits, after selling to Soil Solutions last year, Will said, “everything was wiped out.”
VIM started operating at 29861 Old U.S. 33 west of Elkhart in 2000, after relocating from Goshen. Soil Solutions, an Indiana firm that processes and handles organic waste, bought out VIM on July 25, 2011, and continues the operation, without Will's involvement.
STILL OWES $413,656.83
Precipitating the sale of VIM and K.C. Industries, according to Will, was pressure from IDEM. VIM has been a headache for the regulatory agency and it cited VIM for a range of environmental violations over the years and fielded many calls from angry neighbors.
“IDEM didn't want Ken Will to be involved going forward,” Will said.
As such, Soil Solutions bought VIM and a Juno Beach, Fla., firm called Chocolateyclare bought K.C. Industries two days later.
K.C. Industries, controlled by Will and his wife, Louise Will, actually owned the land and building at the Old U.S. 33 location, leasing the facility to VIM. VIM, consisting of the equipment and scrap wood at the facility, was owned by a group of shareholders that included Will, Vincent McMahon, Emmet McCarthy and Kenneth Anderson, according to the contract selling the firm to Soil Solutions.
It's not clear exactly how much Soil Solutions paid for VIM. The figure is obscured in a copy of the contract accessible via the IDEM website. However, Will said the firm had a total of $4.4 million in debt and that even after the sale, he and the other VIM shareholders had to come up with another $1.6 million to completely cover what it owed to banks.
Likewise, though Elkhart County Auditor's Office records indicate K.C. Industries sold the 35 acres and building where VIM sat for $3,116,024.05 on July 27 last year to Choclateyclare, Will said he didn't see a profit.
“K.C. didn't get a dime,” he said.
K.C. Industries owed around $3.2 million, and Choclateyclare essentially assumed that debt as part of the transaction, also covering an additional $112,00 to $116,000 in property taxes owed. Soil Solutions now leases the Old U.S. 33 land from Choclateyclare, which is headed by McCarthy, the former VIM shareholder.
According to a filing in the IDEM lawsuit against VIM, VIM still owes $413,656.83 to various creditors, including $318,778.98 to an Indianapolis-based law firm. “There's nothing there,” Will said.
He doesn't want to file for bankruptcy, though, and still holds out hope that over the next 20 or 30 years, he can work and save up enought money to cover the remaining debt. He's asked Superior Court 1 Judge Evan Roberts to dismiss the $150,000 fine, a request currently under consideration.
Through it all, Will thinks Soil Solutions needs to be given a shot at running the Old U.S. 33 facility. The recreational vehicle and manufactured housing industries here generate tons of scrap wood that's processed at the plant, material that would otherwise end up at the Elkhart County landfill.
“People need to support Soil Solutions,” Will said. “It's desperately needed.”