Thursday, March 3, 2016

City of San Angelo Sues PEU Owned Hirschfeld

The Standard Times reported:

What began as a promising multimillion-dollar economic venture to generate hundreds of wind energy-related jobs in San Angelo turned into an undertaking that blew south.

The city of San Angelo Development Corp. and the city are seeking to recoup more than $2.7 million in damages, attorneys' fees and minor costs resulting from a 2009 investment to bring a wind turbine tower fabrication plant to town.

COSADC and the city hope to recover the money through a summary judgment hearing scheduled Wednesday in the 119th District Court and avoid going to trial.
The City's press release cited the difficulty negotiating with a private equity owned company.

Negotiating with the private equity hedge fund that today controls Hirschfeld is more challenging than partnering with local ownership with whom the City has had close personal and working relationships for decades.
Texas politicians, starting with Governor Rick Perry, trained PEU owners and affiliates that public money was loose and nearly free.

 "The City and the COSADC could not agree to a minimal repayment," the release stated. "Doing so, and allowing Martifer-Hirschfeld to walk away with millions in taxpayer dollars, would constitute a serious breach of public trust."
It's hard for Insight Equity to monetize Hirschfeld with a multi-million dollar lawsuit hanging over its head.  The City of San Angelo is the first I've come across that cited a PEU owner in suing for economic nonperformance.  I hope it becomes a trend.