NEW HAVEN – Though one chapter in the saga of a Mason County alloy plant may be closed, the legal legacy involving its previous owner, in many instances, remains literally an open book.
About 150 people attended the dedication of Felman Production's alloy plant in New Haven on Set. 12. Among those present were Gov. Joe Manchin III and Congresswoman Shelly Moore Capito.
The ceremony was not for a new plant, but for a 55-year-old facility under new management. Earlier this year, Felman, a Delware-based corporation and subsidiary of Privat Intertrading Group (a Ukrainian-based conglomerate), was purchased for $20 million from its previous owners, Highlanders Alloys.
The acquisition came from U.S. Bankruptcy Court where Highlanders filed for Chapter 11 in May 2005 (Case No. 30516) in the wake of issuing checks to its 150 employees, which were returned for non-sufficient funds.
The incident was the latest in a series of woes that has plagued the plant since Highlanders became owner five years ago.
Trouble from the get-go
Just as it was bought out in bankruptcy, Highlanders purchased the plant in 2001 from American Alloys for $2 million out of bankruptcy court (Case No. 00-30028). Boris Bannai, an Israeli industrialist, received funds from Israeli venture capitalist Eli Reifman to organize Highlanders Alloys LLC as a West Virginia-based corporation.
In addition to Highlanders, Bannai is co-owner of Nokotomi Ltd., a Netherlands-based holding company with mining operations in Namibia and South Africa, and a manganese plant in Poland.
Shortly after the plant was dedicated under Highlanders' ownership in April 2002, a dedication attended by then-Gov. Bob Wise, the legal troubles began. By one count, 32 separate legal actions have been brought against Highlanders in three different jurisdictions since then.
Among the suits included two filed by the state departments of Labor and Environmental Protection for violation of wage and hour and air quality regulations, respectively (James R. Lewis, Commissioner of the West Virginia Department of Labor on behalf of Highlanders' employees v. Highlanders Alloys, LLC and State of West Virginia ex. rel. Stephanie Timmermyer v. Highlanders Alloys, LLC, Kanawha County
Circuit Court, Case Nos. 02-C-1546 and 02-C-3152).
DoL's suit was filed on behalf of the plant's workers for Highlanders' failure to pay them in excess of $250,000 in wages and benefits. The DEP suit sought enforcement of an Oct. 2002 cease-and desist order.
Both suits were settled with Highlanders satisfying DoL's suit in September 2002 and DEP's in January 2003.
Manchin duly noted the commitment by Felman of $12 million into the plant, which includes having more than sufficient funds to meet payroll and comply with environmental regulations.
"They've spent $5 million cleaning up the sins of past," Manchin said, referring to money Felman has already invested into the plant.
Warrants pending for bad checks
Not meeting payroll was a recurrent problem under Highlanders. The problem was so bad that in addition to the DoL suit, the plant's workers through its union, United Steelworkers Local 5171, filed a mechanic's lien for $865,973.42 on Nov. 8, 2002, against Highlanders with two employees personally filing worthless checks charges against Bannai.
Raymond Bonecutter and Robert Rimmey submitted their checks to Mason County Magistrate Court to recover non-sufficient checks issued to them in the amount of $133.68 and $452.06, respectively (Case Nos. 02-W-617 and 02-W-668). Court records show Bannai paid the checks before misdemeanor charges were brought against him.
However, Bannai was charged with misdemeanor worthless check charges in three other cases.
In two cases, filed by Tri-State Roofing and Sheet Metal and Donohues Enterprises, Bannai pled no contest to the charges against him and paid the amount of the checks. In total, Bannai paid $32,911.95 for two bad checks written to Tri-State and $284 to Donohues. Plus, he paid a $100 fine (Case Nos. 02-M-893 & 894 and 02-M-1256).
Bannai's failure to appear before the magistrate in another case regarding a debt of $23,606.44 to Murray Sheet Metal, resulted in a warrant being issued for his arrest (Case No. 03-M-389).
It, along with a bench warrant issued by Mason County Circuit Judge David W. Nibert for non-sufficient payroll checks Bannai wrote to all plant employees in May 2005, are still pending.
Eight cases remain open
The remaining legal actions against Highlanders are civil suits in Mason County Circuit Court filed by contractors for services rendered, but unpaid. According to court records, of the 32 cases filed, eight remain open.
Though not immediately clear, one reason for the number of open cases
is Highlanders failure to hire legal counsel. Though it is represented by Mark A. Ferguson of the Charleston law firm of Sprouse and Ferguson in its bankruptcy case, Highlanders' attorney in the civil cases, Susan Cannon-Ryan, of the Charleston law firm of Shaffer and Shaffer, withdrew as counsel-of-record on March 7, 2003. She cited, among other things, her failure to communicate with Bannai, and his failure to pay for representation.
From most accounts, Bannai, 48, has spent most of his time in his adopted country since early 2003. A native of the former Soviet Union, Bannai immigrated to Israel in 1973.
Since Felman has taken ownership of the plant and has committed resources to its refurbishment, Charles Willet, 61, a ladle operator from Point Pleasant with 42 years in at the plant says if he ever sees Bannai again, it will a moment too soon.
"I hope I never do," Willet said.