I think most of the money with Elio goes to Stu
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From The Sec 11/25/2016 Release...
- Thread starter wizard of ahs
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Ty
Elio Addict
I keep seeing the 1,500 job thing... Who did Elio make that deal with? Elio is renting the facility from Racer Trust, right? Did they rent from Racer Trust and STILL have to provide employment due to some agreement with Shreveport? Did Elio say "We'd like to rent this from Racer Trust and if we do, can we please be forced to have a certain number of employees working there?" I wonder how that went down. It seems more likely that Racer Trust would have an agreement with Shreveport to provide 1,500 jobs and then Elio, by extension, had to agree to provide that number of jobs... I'm confused. I didn't get enough sleep last night.
Elio Amazed
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Again... NO. Elio is not renting from Racer.
They are renting from SBP, a subsidairy of STU's IRG
Stu is renting from the Caddo Parish's IDB.
Caddo Parish has owned the property since 2013.
"In December 2013, the land and its buildings were bought by Caddo Parish’s Industrial Development Board — an agency that exists to foster economic development in Caddo Parish — with $7.5 million of parish funds, according to previous Times reporting. The IDB then leased real estate to the Shreveport Business Park, a subsidiary of the Industry Realty Group, which became property manager on behalf of the IDB and in turn subleased a portion of the land to Elio Motors."
"Caddo Parish Commission spokeswoman Krystle Grindley confirmed the IDB was the lessor of the property but said the parish has “no legal or contractual terms” that mandate the creation of jobs."
http://www.shreveporttimes.com/stor...ing-general-motors-shreveport-plant/91179046/
Here it is from the SEC filing...
"On March 3, 2013, in connection with the acquisition of certain machinery and equipment, the Company entered into a promissory note with the
Revitalizing Auto Communities Environmental Response Trust (“RACER”) for $23,000,000. The promissory note is secured by a subordinated lien on the manufacturing machinery and equipment held in Shreveport, Louisiana. The note is non-interest bearing. As part of the subordination agreement RACER requires all proceeds from the sale of manufacturing machinery and equipment held in Shreveport, Louisiana to be first applied to the outstanding principal balance on the CH Capital Lending, LLC note.
Among the terms of the Company’s purchase agreement with Racer was an agreement to use and develop the property so as to create at least 1,500 new
jobs. The Company agreed that if it had not created 1,500 new jobs by February 28, 2016, it would pay Racer $5,000 for each full-time, permanent direct job that fell below the required number. On March 17, 2015, the Company entered into the second amendment and extended the deadline of this agreement to July 1, 2017. At December 31, 2016, the Company record an accrued liability of $7,500,000. The expense is included in general and administrative expenses in the Statement of Operations.
We must still obtain relief from Racer Trust with respect to an extension of the maturity date of the note due July 1, 2017 and our agreement to create 1,500 jobs by July 1, 2017. If we fail to fulfill that agreement, we have agreed to pay Racer Trust $5,000 for each full-time, permanent direct job that falls below the 5,000 target. We have recorded a current liability of $7.5 million as of December 31, 2016. Should our negotiations with Racer Trust be successful, we will
make the appropriate adjustment to our balance sheet at that time."
So... Bottom line is that the $7.5 Million in fines coming due for EM July 1st is part of the agreement EM made with RACER when RACER sold them the plant equipment. Mystery solved. Also, contrary to what a member posted, EM has NOT socked money away for the fines. They state that they have only "...recorded a current liability of $7.5 million as of December 31, 2016." Which means that they have simply already acknowledged the $7.5 million in fines and have already recorded them in their tally sheet as a liability. Nothing more.
One thing we should also note: According to this Sec filing, it appears that EM still owes RACER...
(or rather CH Capital Lending, LLC) almost the entire purchase price ($23M) of the plant's equipment that EM purchased.
"The note to Racer Trust is secured by a lien subordinated to the lien of CH Capital Lending on certain machinery and equipment and is non-interest bearing, but has default interest of 18% per annum. The note, as amended, requires a monthly principal payment of $173,500 on June 1, 2017, with the remaining outstanding principal due on July 1, 2017. We are currently in negotiations to extend the principal balloon payment beyond 2017. As of December 31, 2016 and 2015, the outstanding principal balance was $21,126,147 and $21,126,147, respectively. See Note 7 Long-Term Debt of the Notes to Financial Statements for more information regarding this debt obligation.
We identified equipment in the Shreveport plant that will not be used in production of the Elio and made the equipment available for sale. Through December 31, 2016, we have received net proceeds of $5.08 million from the sale of equipment, which has been applied to principal on the CH Capital Lending note. As of December 31, 2016, an additional $1.3 million in equipment was available for sale. We believe that approximately $400,000 will be sold in 2017 and approximately $900,000 will be sold in 2018 or beyond. As such, $400,000 has been recorded as assets held for sale on the December 31, 2016 balance sheet, and the remaining balance is included in net machinery and equipment."
And finally... Here's EM contradicting the fact that IDB/Caddo Parish is the owner of the plant. This is from the current SEC filing. I'm surprised that the SEC would let a mistake like that ride without requesting a revision.
"In 2013, we acquired the former General Motors (GM) light truck assembly plant in Shreveport, Louisiana to house our manufacturing operations. The property was one of the facilities transferred to the Revitalizing Auto Communities Environmental Response (“Racer”) Trust in March 2011, which was created to redevelop and sell 89 former GM facilities. The facility equipment was purchased by us from the Racer Trust, with all of the GM manufacturing equipment in place, for $3 million in cash and a $23 million promissory note. The real property was purchased by an affiliate of Industrial Realty Group, LLC (“IRG”), the Shreveport Business Park, LLC, for $7.5 million. IRG and Shreveport Business Park, LLC are entities owned and controlled by Stuart Lichter, one of our directors and significant stockholders. A portion of the purchased machinery and equipment secures a promissory note due to CH Capital."
That passage in the SEC filing directly contradicts this post's opening quote of...
"In December 2013, the land and its buildings were bought by Caddo Parish’s Industrial Development Board — an agency that exists to foster economic development in Caddo Parish — with $7.5 million of parish funds, according to previous Times reporting. The IDB then leased real estate to the Shreveport Business Park, a subsidiary of the Industry Realty Group, which became property manager on behalf of the IDB and in turn subleased a portion of the land to Elio Motors."
http://www.shreveporttimes.com/stor...ing-general-motors-shreveport-plant/91179046/
Very curious.
They are renting from SBP, a subsidairy of STU's IRG
Stu is renting from the Caddo Parish's IDB.
Caddo Parish has owned the property since 2013.
"In December 2013, the land and its buildings were bought by Caddo Parish’s Industrial Development Board — an agency that exists to foster economic development in Caddo Parish — with $7.5 million of parish funds, according to previous Times reporting. The IDB then leased real estate to the Shreveport Business Park, a subsidiary of the Industry Realty Group, which became property manager on behalf of the IDB and in turn subleased a portion of the land to Elio Motors."
"Caddo Parish Commission spokeswoman Krystle Grindley confirmed the IDB was the lessor of the property but said the parish has “no legal or contractual terms” that mandate the creation of jobs."
http://www.shreveporttimes.com/stor...ing-general-motors-shreveport-plant/91179046/
Here it is from the SEC filing...
"On March 3, 2013, in connection with the acquisition of certain machinery and equipment, the Company entered into a promissory note with the
Revitalizing Auto Communities Environmental Response Trust (“RACER”) for $23,000,000. The promissory note is secured by a subordinated lien on the manufacturing machinery and equipment held in Shreveport, Louisiana. The note is non-interest bearing. As part of the subordination agreement RACER requires all proceeds from the sale of manufacturing machinery and equipment held in Shreveport, Louisiana to be first applied to the outstanding principal balance on the CH Capital Lending, LLC note.
Among the terms of the Company’s purchase agreement with Racer was an agreement to use and develop the property so as to create at least 1,500 new
jobs. The Company agreed that if it had not created 1,500 new jobs by February 28, 2016, it would pay Racer $5,000 for each full-time, permanent direct job that fell below the required number. On March 17, 2015, the Company entered into the second amendment and extended the deadline of this agreement to July 1, 2017. At December 31, 2016, the Company record an accrued liability of $7,500,000. The expense is included in general and administrative expenses in the Statement of Operations.
We must still obtain relief from Racer Trust with respect to an extension of the maturity date of the note due July 1, 2017 and our agreement to create 1,500 jobs by July 1, 2017. If we fail to fulfill that agreement, we have agreed to pay Racer Trust $5,000 for each full-time, permanent direct job that falls below the 5,000 target. We have recorded a current liability of $7.5 million as of December 31, 2016. Should our negotiations with Racer Trust be successful, we will
make the appropriate adjustment to our balance sheet at that time."
So... Bottom line is that the $7.5 Million in fines coming due for EM July 1st is part of the agreement EM made with RACER when RACER sold them the plant equipment. Mystery solved. Also, contrary to what a member posted, EM has NOT socked money away for the fines. They state that they have only "...recorded a current liability of $7.5 million as of December 31, 2016." Which means that they have simply already acknowledged the $7.5 million in fines and have already recorded them in their tally sheet as a liability. Nothing more.
One thing we should also note: According to this Sec filing, it appears that EM still owes RACER...
(or rather CH Capital Lending, LLC) almost the entire purchase price ($23M) of the plant's equipment that EM purchased.
"The note to Racer Trust is secured by a lien subordinated to the lien of CH Capital Lending on certain machinery and equipment and is non-interest bearing, but has default interest of 18% per annum. The note, as amended, requires a monthly principal payment of $173,500 on June 1, 2017, with the remaining outstanding principal due on July 1, 2017. We are currently in negotiations to extend the principal balloon payment beyond 2017. As of December 31, 2016 and 2015, the outstanding principal balance was $21,126,147 and $21,126,147, respectively. See Note 7 Long-Term Debt of the Notes to Financial Statements for more information regarding this debt obligation.
We identified equipment in the Shreveport plant that will not be used in production of the Elio and made the equipment available for sale. Through December 31, 2016, we have received net proceeds of $5.08 million from the sale of equipment, which has been applied to principal on the CH Capital Lending note. As of December 31, 2016, an additional $1.3 million in equipment was available for sale. We believe that approximately $400,000 will be sold in 2017 and approximately $900,000 will be sold in 2018 or beyond. As such, $400,000 has been recorded as assets held for sale on the December 31, 2016 balance sheet, and the remaining balance is included in net machinery and equipment."
And finally... Here's EM contradicting the fact that IDB/Caddo Parish is the owner of the plant. This is from the current SEC filing. I'm surprised that the SEC would let a mistake like that ride without requesting a revision.
"In 2013, we acquired the former General Motors (GM) light truck assembly plant in Shreveport, Louisiana to house our manufacturing operations. The property was one of the facilities transferred to the Revitalizing Auto Communities Environmental Response (“Racer”) Trust in March 2011, which was created to redevelop and sell 89 former GM facilities. The facility equipment was purchased by us from the Racer Trust, with all of the GM manufacturing equipment in place, for $3 million in cash and a $23 million promissory note. The real property was purchased by an affiliate of Industrial Realty Group, LLC (“IRG”), the Shreveport Business Park, LLC, for $7.5 million. IRG and Shreveport Business Park, LLC are entities owned and controlled by Stuart Lichter, one of our directors and significant stockholders. A portion of the purchased machinery and equipment secures a promissory note due to CH Capital."
That passage in the SEC filing directly contradicts this post's opening quote of...
"In December 2013, the land and its buildings were bought by Caddo Parish’s Industrial Development Board — an agency that exists to foster economic development in Caddo Parish — with $7.5 million of parish funds, according to previous Times reporting. The IDB then leased real estate to the Shreveport Business Park, a subsidiary of the Industry Realty Group, which became property manager on behalf of the IDB and in turn subleased a portion of the land to Elio Motors."
http://www.shreveporttimes.com/stor...ing-general-motors-shreveport-plant/91179046/
Very curious.
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Elio Amazed
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The rent money yes. IDB/Caddo Parish gets 15%. The fines no.
EM is renting from SBP, a subsidairy of STU's IRG
Stu is renting from the Caddo Parish's IDB.
Caddo Parish has owned the property since 2013.
For details on the fines and who has an agreement with whom...
See my previous post.
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Ty
Elio Addict
Okay. I had the names reversed. Elio STILL isn't in a lease with Caddo Parish and doesn't have to produce 1,500 jobs, right?
Elio Amazed
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EM faces $7.5 in fines coming due July 1st, 2017 unless they produce 1500 jobs because of the equipment purchase agreement with RACER.
Not because of any non-existent agreement with IDB and/or Caddo Parish. It's actually $5000 per each job short of the 1500 jobs agreed upon.
While Stu (IRG > SBP) basically rents from Caddo Parish (IDB), and EM sublets from Stu, Caddo Parish and IDB have nothing to do with the fines.
And, in addition, you're right in that, to my understanding, EM is not directly answerable to IDB or Caddo Parish for anything what-so-ever.
Not because of any non-existent agreement with IDB and/or Caddo Parish. It's actually $5000 per each job short of the 1500 jobs agreed upon.
While Stu (IRG > SBP) basically rents from Caddo Parish (IDB), and EM sublets from Stu, Caddo Parish and IDB have nothing to do with the fines.
And, in addition, you're right in that, to my understanding, EM is not directly answerable to IDB or Caddo Parish for anything what-so-ever.
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BaldGuy
Elio Addict
How often do they have to pay these fines? <yearly/monthly>
I wonder if they can do a work around with the agreement. Perhaps hire 1500 high school kids for a day to clean up around the plant/community.
I wonder if they can do a work around with the agreement. Perhaps hire 1500 high school kids for a day to clean up around the plant/community.
Hilarious idea for getting around the 1500 promised manufacturing jobs , but I doubt you could find 10 USA high school kids that would want to do that kind of work.
The July 1, 2017 deadline fine was included in the extension of the original failed contract agreement.
Elio Amazed
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Did you also catch this part?
"The note to Racer Trust is secured by a lien subordinated to the lien of CH Capital Lending on certain machinery and equipment and is non-interest bearing, but has default interest of 18% per annum. The note, as amended, requires a monthly principal payment of $173,500 on June 1, 2017, with the remaining outstanding principal due on July 1, 2017. We are currently in negotiations to extend the principal balloon payment beyond 2017. As of December 31, 2016 and 2015, the outstanding principal balance was $21,126,147 and $21,126,147, respectively. See Note 7 Long-Term Debt of the Notes to Financial Statements for more information regarding this debt obligation."
"As amended" partly refers to the fact that this agreement has already been renegotiated twice to give EM a year's extension each time on both the 18% per annum (approximately $4M/YR) and the fines deadlines. Nice thought BG, but by the time they were through with temp services, liability, legal, clerical and wages for 1500 of anyone for one day, it would probably amount to in excess of a quarter million that they don't have. Besides, weaseling out of the terms of a contract that way would severely devistate their already shaky trust factor in too many eyes.
IMHO, Racer/CH Capital will probably negotiate some kind of extension or partial extension on the terms. After all, with EM having less than $200k in the bank and almost nothing in the way of recoverable assets (including the extremely overestimated value of the equipment used as collateral to secure the Racer/CH Capital Lien) to divide between countless lenders and investors, what choice do they really have but to find some way to let the game continue for a few more months? But I also think that, at this point all it would take for end game would be for one of these major players to stick to the terms of their agreement and call in their markers.
"The note to Racer Trust is secured by a lien subordinated to the lien of CH Capital Lending on certain machinery and equipment and is non-interest bearing, but has default interest of 18% per annum. The note, as amended, requires a monthly principal payment of $173,500 on June 1, 2017, with the remaining outstanding principal due on July 1, 2017. We are currently in negotiations to extend the principal balloon payment beyond 2017. As of December 31, 2016 and 2015, the outstanding principal balance was $21,126,147 and $21,126,147, respectively. See Note 7 Long-Term Debt of the Notes to Financial Statements for more information regarding this debt obligation."
"As amended" partly refers to the fact that this agreement has already been renegotiated twice to give EM a year's extension each time on both the 18% per annum (approximately $4M/YR) and the fines deadlines. Nice thought BG, but by the time they were through with temp services, liability, legal, clerical and wages for 1500 of anyone for one day, it would probably amount to in excess of a quarter million that they don't have. Besides, weaseling out of the terms of a contract that way would severely devistate their already shaky trust factor in too many eyes.
IMHO, Racer/CH Capital will probably negotiate some kind of extension or partial extension on the terms. After all, with EM having less than $200k in the bank and almost nothing in the way of recoverable assets (including the extremely overestimated value of the equipment used as collateral to secure the Racer/CH Capital Lien) to divide between countless lenders and investors, what choice do they really have but to find some way to let the game continue for a few more months? But I also think that, at this point all it would take for end game would be for one of these major players to stick to the terms of their agreement and call in their markers.
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