CHARLESTON – The organization that represents the interests of West Virginia's towns and cities is accused of failing to disclose to its members the relationship between one of its former officers, and his now-bankrupt company in their roles in helping local governments buy equipment.

The West Virginia Municipal League is named as a defendant in lawsuit filed Jan. 18 by the Eric S. Gordon Trust. In its suit filed in Kanawha Circuit Court, the Gordon Trust through its trustee, Scott Gordon, alleges WVML was negligent in allowing Bridgeport Mayor James C. Christie to serve as one its officers while allowing his company, Comvest Ltd., Inc., to profit from the sale of equipment to municipalities.

Christie's profiteering, the suit alleges, includes not only a commission on equipment sold, but also converting the proceeds for personal use.

A line blurred

According to the suit, the Gordon Trust aided in financing the lease of equipment to two towns and two volunteer fire departments between 2007 and 2010. All together, the Gordon Trust provided $86,620 to help the towns of Paw Paw in Morgan, and Handley in Kanawha counties and the Cora and Harts volunteer fire departments in Logan and Lincoln counties, respectfully.

The leases were facilitated through WVML's lease/purchase program. According to the suit, the program, whose mailing address is a Post Office Box in Clarksburg, was done in conjunction with Comvest, whose address, court records show, is the same P.O. Box.

According to its Web site, WVML is a non-profit organization that represents all of the state's 232 municipalities. In addition to conducting research, WVML also lobbies the state legislature on their behalf.

Upon learning of the program, WVML members would arrange for Comvest to partner with investors, either individuals or financial institutions. Once the investors fronted them money, Comvest would purchase the equipment, arrange for it to be delivered to the WVML member who would then make regular payments to Comvest.

According to the suit, Comvest, "derived its profit by increasing the financing price of the equipment and characterizing this increase as a 'commission' which was charged to the investor and the municipality." During the time the Gordon Trust fronted money for the equipment leases, Christie served as both secretary/treasurer for Comvest, and WVML's secretary.

In its suit, the Gordon Trust alleges most if not all of the equipment it financed through WVML's lease/purchase program was never delivered by Comvest. Instead, Comvest "converted [the Gordon Trust's] funds to its own use."

According to its suit, the Gordon Trust did not become aware of Comvest's failure to deliver the equipment until last February. It was then an unidentified Comvest employee informed Scott Gordon in a telephone conversation that not only did Comvest fail to deliver the Paw Paw equipment, but also "there were problems with Comvest."

Ten months prior to that conversation, Comvest filed for Chapter 11 bankruptcy. Records show, Paw Paw, the Town of Handley Sanitary Board and the Cora Volunteer Fire Department are listed as among the largest creditors holding unsecured claims.

According to the schedules to its bankruptcy petition filed April 16, Comvest had $2,376,456.49 in assets and $2,690,749.55 in liabilities.

The Gordon Trust alleges WVML prior to Comvest filing for bankruptcy "became aware of irregularities regarding the lease/purchase program and failed to reasonably act." The reason is that WVML "derived compensation from each transaction in which Comvest was engaged."

In its suit, the Gordon Trust maintains WVML owed both its members, investors in the lease/purchase program and the public an obligation to disclose its relationship with Comvest and Christie. In failing to do so, the Gordon Trust alleges it has suffered "pain, suffering, annoyance, inconvenience and aggravation."

It seeks unspecified damages, attorneys fees court costs and interest. It is represented by Charleston attorney I. Franklin Hartman III.

The case is assigned to Judge Charles E. King, Jr.

Kanawha Circuit Court case number 12-C-122

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