By Jessie Burchette
jburchette@salisburypost.com
The new partnership controlling High Rock Properties and the former textile mill property will apparently inherit the job of paying back wages owed to 300-plus Color-Tex workers.
The workers have been waiting for more than eight years.
David “Dave” Risdon, a board member of Color-Tex when it closed Oct. 1, 2000, agreed to pay some $160,000 in back wages to the employees who lost their jobs when the mill closed.
Risdon, a former Boston investment banker who now lives in Huntersville, worked for five years to build a 2-mile road race course on the 200-acre property along the Yadkin River in Spencer. Risdon was voted out by the High Rock board of directors last week.
A lawyer who represented the textile union and an official with the N.C. Department of Labor said Wednesday the new partnership will inherit the debt to the workers.
John Hoomani, general counsel for the Department of Labor, said he exchanged voice mails with Frank McGuire, the senior vice president of High Rock Properties, on Wednesday.
Hoomani said McGuire left a message that he was aware of an outstanding obligation and would be in contact early next week. McGuire said he would be unavailable until Monday, due to the weekend marriage of his daughter out of state.
Ellen McGuire, Frank McGuire’s daughter and owner of a media and public relations firm in Davidson, gained control of High Rock Properties last week. Documents indicate Risdon owed Ellen McGuire $490,000 and had pledged his interest in the company to secure the note. He was unable to pay.
According to Labor Department records, the 320 former Color-Tex employees are owed $101,000 plus an unspecified amount of interest.
Risdon had paid $60,000 into the 401(k) plan for the workers.
Hoomani said he talked with Risdon earlier this month and was assured the money would be coming soon. Hoomani said Risdon agreed to pay an estimated $2,000 to hire a firm to do the paperwork and issue the checks and do the W-2 forms.
On June 8, Risdon left a voice message telling Hoomani “funding should be complete this week.” The plan was that once funding was in place for the race track, the back wages would be paid.
Hoomani said that on numerous occasions Risdon assured him that “they were closing a loan in a week or two.”
Risdon told the Post Tuesday that he was unable to get financing for the track.
Hoomani learned of Risdon’s ouster in a Google alert on the Post story in Monday’s paper.
Hoomani said he is hopeful the new ownership group will immediately pay the employees. “We’ve been waiting eight years and still haven’t gotten it,” he said. “I will believe it when I see it.”
Bruce Shine, a Tennessee-based attorney who was the general counsel for the Textile Workers of America, said Wednesday the Color-Tex closing and plight of the workers was one of the saddest situations he has seen in 40 years of practicing labor law.
Workers found out the plant was closed when they showed up for work on a Friday morning and found the gates locked.
And the shock continued.
They would not get paid for the work they had already done.
And then they found out that the company’s health insurance had been canceled because of non-payment. Color-Tex had continued to take out the employees’ share of health insurance premiums for months after the insurance had stopped.
Shine said workers had between $400,000 and $500,000 in medical costs they had incurred while thinking they had insurance.
“The Boston wheeler-dealers had withheld insurance premiums, union dues, 401(k) and anything else they could hold,” he said.
Shine and the union pushed the issue, going to Rowan County District Attorney Bill Kenerly and the N.C. Attorney General’s Office.
“North Carolina had a statute that it was a felony to withhold insurance premiums and not remit to the carrier,” Shine said. With the state ready to prosecute, the Boston group came up with $400,000 to pay health costs and stay out of criminal court.
The Boston group that controlled Color-Tex filed for bankruptcy in Boston. “They were a bunch of damn sharpies. They filed the petition in Boston. All the employees and creditors were in North Carolina. They didn’t think anybody from North Carolina would show up in Boston,” he said.
Shine still vividly recalls the court proceeding on the 28th floor of the Thomas P. O’Neill Building looking out over the harbor. The room was filled with $450-an-hour attorneys representing the company.
Shine succeeded in getting the bankruptcy thrown out.
Union officials considered filing an action under the WARN Act in an attempt to collect 60 days of wages. The WARN Act requires advance notice of plant closings.
“There was no sense in filing. There was no money, and the union wasn’t in the business of owning land,” Shine said.
He noted that Risdon eventually got control of the property.
Speaking from memory, Shine said the deal to pay the back wages was tied to the property and the new ownership group would have the liability of paying the agreement reached with the N.C. Department of Labor.
Shine recalled being at a meeting of workers a day or so after the plant closed.
“There were 200 people in the Union Hall, a man came up and started telling me about his son who had to have dialysis two or three times a week.
He had tears in his eyes and asked ‘What am I going to do?’ ”
Shine recalled that a representative of U.S. Rep. Mel Watt at the meeting offered to help.
“It was the saddest situation I’ve seen in 40 years,” Shine said, adding those workers still don’t have their money after eight years of waiting.
Contact Jessie Burchette at 704-797-4254.