Posted by Dennis Herrick on August 13, 2008 at 06:38:37:
'I'll fight to the death,' says USA Springs chief
By BOB SANDERS
N.H. Business Review
Article Date: Friday, August 1, 2008
USA Springs needs 30 to 40 days to secure a loan that will enable it to pay off its creditors and finish building its controversial bottling plant in Nottingham, said Francesco Rotondo, facing his creditors for the first time Tuesday in bankruptcy court in Manchester.
USA Springs, which at the end of June filed for Chapter 11 reorganization, owes more than $13.9 million and only has $335.17 in its checking account, but the business and real estate is worth more than $127 million, according to bankruptcy papers.
Rotondo said that as a last resort he could give in to the "sharks who were willing to buy the company" and "make me their slave" in order to pay off the creditors, but instead he was furiously working on closing a deal with two investors for more than $70 million that would enable him to retain control.
"All I seek from you is to buy me some time, so I don't lose my company that I spent 11 years to build," he said.
Rotondo said he spent $5 million of his own money and another $10 million from investors to go through the permitting process, which community groups and town officials have fought tooth and nail to prevent.
Opponents have cited concerns that his bottling plant would suck the area dry in order to sell the water that they depend on. Rotondo has dismissed such concerns, though he spent $1.5 million to clean up a contaminated area near the plant site, to ensure that project would not spread any pollution.
Rotondo said he bought up several properties for less than $2 million under the cloak of secret trust arrangements "because we didn't want people to know us, so they could fight us," he said.
That property is now worth $27 million, the company claims, citing an independent appraisal.
Rotondo eventually secured the permitting and started working on a steel structure that covers several acres. A group calling itself the Nottingham Tea Party recently pushed an ordinance at the town meeting that would put the company in violation, if it ever opened – a ruling that is sure to be challenged in the courts.
But for now, it financing is the company's biggest obstacle
Rotondo said he sold shares in the company to various friends and family member, as well as hit them up for short-term loans. He said he owes his brother for instance, $344,000. During the last year, he said he paid himself $106,000, and "I'm the only one who gets paid."
The money, he said, came from selling his own shares, so he had to hit up Salem lawyer Armand M. Hyatt, to help finance a trust with his family's money to allow him to retain control of the company.
His biggest loan, however, is a two-year, 12.9 percent $8.4 million mortgage from Roswell Commercial Mortgage, a Pennsylvania limited liability company, to pay off older creditors and continue construction until landing longer-term financing.
USA Springs began missing payments on that loan in February, and Roswell began foreclosure procedures in June, but the bankruptcy filing has put that off.
Rotondo's attempt to secure long-term financing stalled as the economy soured, he said. But he said he was confident he would be able to strike a deal, despite all the obstacles.
"They are basically killing me," he said of both his opponents and competitors. "With this bankruptcy filing, we seem even weaker. But I come from Rome, and I'm a gladiator, and I'll fight everybody to the death. I'm going to build this company, no matter what."
Several creditors seemed impressed with what Rotondo had to say.
"He's a remarkable man, and I'm certainly optimistic," said Ray Aho, an owner of Aho Construction, a New Ipswich company that has a mechanic's lien on the property for $206,000.
But John Terinko, a member of the Nottingham Tea Party, said, "We are one of the bad guys, I guess, and I hope we can finish him and prevent this project. The science says it's bad for the environment."
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Letters to the Editor - August 13 2008
Article Date: Wednesday, August 13, 2008
No one 'pushed' Nottingham
To the editor: Your Aug. 1 article, "I'll fight to the death," by Bob Sanders seems to lack the objectivity required (or should be required) by reporters.
While I found the article interesting, I was very taken aback by the comment, "A group calling itself the Nottingham Tea Party recently pushed an ordinance at the town meeting that would put the company in violation, if it ever opened — a ruling that is sure to be challenged in the courts."
Although you are giving us a lot of power, I'm afraid I can't accept it. We never "pushed" anything. Instead we held educational sessions around the town for several months, developed informational brochures, and met with individuals to explain the ordinance. It was then up to the residents of Nottingham to decide for themselves what they wanted.
Obviously, over 60 percent of those attending the Town Meeting wanted the ordinance — no one pushed them into it.
Gail Mills
West Nottingham