PORT ANGELES — Peninsula Plywood’s creditors can probably forget about getting their money back from the failed company, Grant Munro, a principal partner, said Wednesday.
Those creditors include Port Angeles city and port governments, which combined are owed more than $518,000 for past-due utility bills, rent and other costs associated with PenPly, which was in business for 22 months until going belly-up Dec. 20 and shutting down for good.
“There’s no money left,” Munro said.
The former Port Angeles City Council member said the law protects the limited liability corporation’s investors from legal action.
“As an LLC, the investors have limited liability, which basically is no liability,” Munro said.
The port, which leased the property to PenPly, is owed $204,443 for rent and other charges.
The city, which provided utilities, is owed $314,489.
The port has turned PenPly’s bills over to a collection agency, while the city is considering legal action, port and city officials said this week.
“In my view, in the investors’ view at PenPly, they are going to be pounding sand,” Munro said.
“I hate to say that, but at the end of the day, that’s corporate life. There are quite a number of investors, and none of them are going to be willing to pay money.
“The investors are out far more than the public sector.”
Port Executive Director Jeff Robb said Wednesday that he was not surprised at Munro’s reaction to the city’s and port’s intentions to collect what’s owed to the public.
“That does not deter us from looking at all avenues for collection,” Robb said.
“As responsible public officials representing the citizens, we have to pursue all avenues.”
City Manager Kent Myers, Mayor Cherie Kidd and Port Commission President John Calhoun did not return calls for comment Wednesday morning.
Company President Josh Renshaw said in an earlier interview that PenPly’s investors put up $700,000 to start up the company at the site of KPly, a former plywood company, employing up to 159 people and dispensing about $10 million in payroll at the 19-acre site.
Investors also loaned PenPly funds to keep it afloat during its brief lifetime, including after a fire in May 2010, just two months after production started, Munro said.
“We had to stop putting money into it,” Munro said.
“We just got sucked in deeper. We thought we could turn a corner.”
PenPly’s operations also were funded by a $1 million state Department of Commerce loan and a $500,000 grant from the state Community Development Block Grant Program.
Nineteen equity investors were shown making $1 million in loans to the company ranging from $1,000 by Renshaw to Munro’s $295,000 as of February 2010, a month before the company started production, according to state Department of Commerce records obtained by the Peninsula Daily News under a state public records request.
Those records show PenPly, along with Commerce’s $1 million loan, also borrowed $950,000 from Sound Bank and $950,000 from Enterprise Cascadia and had combined loans of $3.9 million.
PenPly was in default of the Cascadia loan as of Nov. 3, about six weeks before it shut down, when $27,600 was left from the community development block grant, according to the records.
The company never recovered from the fire, and the management team made mistakes, but other factors also played into the company’s demise, Munro said.
“The markets were difficult,” he said. “It was a very tough business.”
PenPly’s employees received their wages, but not all of PenPly’s small vendors were as fortunate, Munro said.
“I did everything I could to get money for those guys, but in the end, there was just not enough money to pay them,” he said.
“The banks and agencies are still a little mad, but they just need to get over it and move on.”
Munro said he is negotiating with the port to use the mill site for storage and debarking of logs that would be shipped to China.
But the port and Munro “are a fair ways apart on negotiations,” Robb said.
“His initial offer was something that we could not recommend to the [port] commission.”
________
Senior Staff Writer Paul Gottlieb can be reached at 360-417-3536 or at paul.gottlieb@peninsuladailynews.com.
Reporter Tom Callis contributed to this report.