Arkansas Attorney Lawyers

With all the phenomena, Bill Russell Oil Co. does not seem like a good candidate for one dollar by many loans guaranteed by the U.S. Department of Agriculture. The Rector, Ark.., Companies owned by Bill Russell and Sandra has been locked in disputes with costly distributors. It has been studied for its leaking underground storage tanks. Several of its service stations were in disrepair, it is also one was leveled by a tornado.

But in June 2000, the USDA has allowed the company to a $ 3 million by the loan agreement intended to cover up to 80 per cent of the loss, if the loan was bad.

And evil was ready quickly, cost millions of taxpayers.

The decline in oil Bill Russell sheds light on questionable practices of credit allocation and monitoring of the spotted USDA’s Business and Industry Guaranteed Loan Program, the promotion of development by supporting loans in rural areas .

Bill Russell oil was a loan from New York-based lender, now known as Business Loan Express, or BLX, participation by Allied Capital and one of biggest players in the state-guaranteed loans. BLX earned royalties for the transmission and management of loans and could even more money from federal funds from the resale of its guaranteed loans to another lender. If the credits were bad, the government has paid the costs of most clearance, as in the case of Bill Russell oil.

A “Washington Post”, the analysis showed that from 2001 to 2006, the USDA has had to pay $ 34 million to buy 13 BLX loan guarantees - one every five representatives of the USDA-backed loan from BLX. 13-The loan to certain enterprises inside and outside of bankruptcy, hands tax bills, or to fight a declining industry.

A Maryland service-station operators received $ 3 million loan guaranteed but soon lost their license to pay millions because of the absence of taxes on gasoline. It remains ready to bankruptcy and two years later. A mushroom farm in Pennsylvania has obtained a loan of $ 3.4 million while in bankruptcy and a loan of $ 1.7 million a few years later. It went bankrupt this year also, and it is now Defunct. A Hanover, Pa, a manufacturer of wallpaper with losses mounting got a $ 3 million in loan guarantees November 2000. He filed for bankruptcy in 2005.

In all cases, USDA officials BLX employees for the study of borrowers, the implementation of Due Diligence little on their own. Now, questions are raised about Bill Russell BLX loans to oil and other USDA officials have their review of the Inspector General on the entire loan portfolio. BLX could be asked to pay millions.

In January, an executive with the company Troy, Mich., the office has been accused of fraud loan with a volume of losses of more than $ 70 million in Small Business Administration guaranteed loans. He pleaded guilty and agreed BLX, the Agency will reimburse up to $ 10 million loss during the independent review of all new loans.

Last month, Allied Capital announced that BLX was “clearly the emphasis on” his government has guaranteed loans to businesses conventional focus on small businesses and mortgages. He cited “BLX difficulties arising . ”

BLX post referred a journalist seeking an interview with a public relations firm, the return calls stopped after a first interview.

The USDA’s Business loan guarantee and Industry is the biggest programme of the Agency for economic development efforts to support rural development. It is available for businesses located in areas with a population of 50000 The maximum loan is 25 million dollars, and most loans from 80 per cent, a guarantee of the state.

Officials from the USDA to emphasize that the aim of the programme is supported by banks, they are encouraged to fund rural development. “Our customer is the bank, the borrower is not,” said William Hagy, vice-director of Business programme.

Until 1996, the USDA has helped staff loans and verification to determine the creditworthiness of borrowers. That year, the primary responsibility for the implementation of Due Diligence was moved to the lenders. Well, the USDA staff verification of lenders, but analyses were not the borrower.

Since the program’s inception in 1974, nearly 2700 loans have led to losses. Have defaults taxpayers, costs $ 1.46 billion over the course of 13.8 billion dollars in the form of loans. The loss of 10.6 percent is almost two times higher than that of the Small Business Administration’s most popular credit program and guarantee higher than the price to pay for commercial lenders.

Hagy said: “The program is not lender of last resort. They are by law allegedly credit quality …. [creditor], ostensibly to deal with this the same way as a commercial loans .
A company fight

Bill Russell oil which is headquartered in Rector, a community of 2000 in the north-east of Arkansas near the border, Missouri, 20 service stations operated Split almost evenly between the two countries. In December 1999, the Missouri Department of Revenue Bill Russell withdraw the licence of fuel oil, so there is no longer sell gasoline at its nine subsidiaries in the country. A declared a spokesman for the Agency is prohibited from examining State, whose reasons for its actions.

Around this time, Bill Russell oil paid two distributors of gasoline a total of $ 536000 in judgements in the economy of litigation.

Bill Russell was also fighting for their oil service stations to environmental standards. In April 2000 the U.S. Environmental Protection Agency have identified 62 violations of the company underground storage reservoirs and proposed a contract to a fine of $ 314558, the disk.

Still, only two months later, the USDA has agreed to return to officials of a loan of $ 3 million the company to New York-based BLC Commercial Capital Corp., a predecessor of BLX. Bill Russell, said the oil money would help create four jobs and provide another 11.

Shirley A. Tucker, Director of Business USDA’s programs in Arkansas, said his office to the borrower and the lender must certify that the oil Bill Russell meets all environmental requirements. Tucker said he is not about the EPA investigation until they read in a local newspaper, several months after the granting of loan guarantees were approved. “I was surprised,” she said. “Under the condition, which was up to the lender, that our attention.”

While the lender was responsible for Due Diligence in the loan application, USDA staff denied that they can have a credit too risky. Firstly, the question of Arkansas Bill Russell office Oil “ability to generate volume” enterprises, whether their owners’ claims, he went to generate, “said Tucker. But the office allows the company and the lender on improving figures. The loan to meet “minimum requirements” for approval.

“We second-guess us,” said Tucker. “We need to connect with our probably good.

Once the guarantee was approved in June 2000, the New York Society for the loan to another lender, industry common practice. Bill Russell quickly behind oil fell on the loan and payments are arrested, interviews and records. It was stated offender in March 2001. And June, the owner has requested an assurance that the USDA buy it back. The cost: $ 2.5 million, including interest.

“It was difficult to see how a loan can go faster south,” said Tucker. Later, she went for some service stations. “We found some no electricity in the day, when we are ready. There was no possibility of exploitation,” she said.