VAN BUREN TOWNSHIP, Mich., Dec. 10, 2019 /PRNewswire/ -- Van Buren Charter Township has filed a complaint in Michigan's Wayne County Circuit court against Visteon Corporation (NASDAQ: VC), which is headquartered in the Township. The Township is a semi-rural community in western Wayne County, consisting of approximately 10,000 households and a per capita annual income of approximately $25,000. Visteon is one of the world's largest automotive parts supply companies.
In its complaint, the Township asks the Court to find that Visteon Corporation breached its contract with the Township. In that contract—a settlement agreement was reached between the parties while Visteon was mired in bankruptcy—the Township gave the global auto parts supplier massive property tax concessions in exchange for Visteon's commitment to make payments in the future that would be necessary to avoid a default on the $28 million in bonds that the Township's Local Development Finance Authority (LDFA) had previously issued to help Visteon develop its world headquarters, "Visteon Village." As originally structured, Visteon's property tax payments would have been sufficient to pay off the bonds; after the property tax concessions, a future shortfall was inevitable, which is why the Township conditioned the concession on Visteon's assistance in covering the future shortfall.
With the property tax concessions from the Township, Visteon emerged from bankruptcy and has enjoyed financial success. In 2018 alone, it reported $164 million in net income. Now, however, Visteon has rejected the Township's request for payment under the agreement, denying that it has any obligation to assist the Township cover the shortfall on the bond payments. Because Visteon has failed to honor its commitment to the Township, the Township has already experienced its first shortfall, forcing taxpayers to pay $618,736.31 on October 1st of this year.
"We tried to responsibly manage financial responsibilities by bringing this shortfall to Visteon's attention when we had certainty of the shortfall amount and the date of its occurrence," said Van Buren Township Supervisor Kevin McNamara. "For years, the Township told Visteon the shortfall would occur in October 2019. For years, Visteon has been telling the Township and the courts that the Township's projections are hypothetical or speculative. Well, it's turned out exactly as we projected, and Visteon is still stonewalling us, leaving taxpayers to pick up the tab on the shortfall. We're working on our residents' behalf to prevent that from happening. It's in the best interest of our taxpayers to put this case in front of the court. We are hopeful that the court will make Visteon finally keep its promises to our community."
Van Buren Charter Township vs. Visteon Corporation may be reviewed at Case # 19-016479-CB.
SOURCE Van Buren Charter Township