City attempts to recoup money from failed loan
IRONWOOD — The city of Ironwood is seeking to recoup some of the money it stands to lose in a $60,000 loan that was approved in 2010 for a new business that never got of the ground.
The city commission agreed Monday to try to sell equipment it has received from the ill-fated loan to Entree and Companions, a start-up company that was associated with Old World Meats.
Entree and Companions, a catering and food business, went out of business after repaying only about $1,000 on the $60,000 loan obtained through the city’s revolving loan fund, city officials said.
The equipment that was purchased with part of the loan money by former Illinois resident Mike Farley was used as a collateral for the loan, so the city now has the equipment in possession.
The equipment will be sold to the highest bidders, with a stipulation that at least 35 percent of the original purchase prices be received in the process.
City staff members must then acquire approval from the state of Michigan on the bid process because the RLF funds are federal money administered through the state.
City manager Scott Erickson explained the loan for the deli-catering service was for a start-up business. Erickson said the RLF loans were available to companies that didn’t qualify for bank loans.
The money was loaned by the Ironwood Economic Development Commission at a time when the city was attempting to use up its RLF money, then destined for a regional Upper Peninsula loan program pot.
City commissioner Rick Semo said the loan application was extensively researched and the applicant met all loan specifications.