Builder
holds up investor payment - This is not the first delay
for Akron-based Evergreen Investment
Evergreen Investment Corp. is again extending the time
to repay principal it owes some investors who bought high-yield
certificates in the Akron home-building company.
Evergreen President David Willan said Tuesday that payments
to some investors whose certificates matured in June will
be delayed at least an additional 30 days.
In July, the company notified about 100 investors that
principal payments would be delayed 60 days, as provided
in Evergreen's contract.
That term is coming to an end. But the contract also
allows the company to limit payouts to 10 percent of the
net proceeds during any one month.
"We continue to raise funds for investor repayments
by selling assets, which takes time," Willan said.
The company, located on West Market Street, signed a
consent agreement with the state in late June and agreed
not to sell any more securities under its current offering.
The Ohio Department of Commerce alleged that Evergreen
salesman Dan Mohler was not properly licensed and that
the company had sold certificates while it was insolvent.
The department's Division of Securities alleged Evergreen
sold 478 investment certificates worth more than $6.1
million within the first five months of this year. It
had $267,000 more debt than assets in December, the state
alleged.
Evergreen sold the certificates to fund operations of
Evergreen Homes LLC and a related company, which built
and sold homes. Their customers primarily were buyers
with credit problems.
Willan said some of the June investors have been repaid
their principal, but he could not say how many.
"Evergreen has made all of the principal payments
that will be made this month and will not be making any
more for the next 30 days," he said in response to
e-mailed questions. "Those certificates that have
not been paid will continue to earn interest at the rate
quoted in their contracts."
September interest payments will be made as scheduled,
he said.
Evergreen has voluntarily updated the Division of Securities
about repayment of principal, Willan said.
The company has not applied to make an additional offering,
he said, although "this remains an option that is
under consideration."
Ohio Department of Commerce spokesman Dennis Ginty said
Evergreen investors who have not received their principal
can file a civil suit seeking to rescind their purchase
of a certificate, based on the state's action against
the company.
