The Steel That Binds
Although it will likely do them no good, two prominent figures in Connecticut’s manufacturing world are channeling their bad experience into a lawsuit-ridden, costly business deal in hopes that a change in state law could help other businesses avoid similar headaches in the future.
How are they doing it? They are reaching out to a fellow member of the state’s manufacturing fraternity, a lawmaker who is in a position to help the rest of the Nutmeg State’s business community.
The story starts back in November 2006 when the long-time Wallingford banquet facility, Mountainside, was put up for auction. TD Banknorth had foreclosed on the property, which had been owned and run for 40 years by members of the Groth family. The Groths, whose home was on the Meriden side of the property, had reportedly been unable to work out an arrangement to pay off a $3.7 million mortgage on the property, a wedding and conference facility.
Two figures from Connecticut’s manufacturing world came forward to buy the property: Joseph Vrabely Jr., owner of Atlantic Steel and Processing in Waterbury, and Fred C. Ulbrich Jr., chairman emeritus of North Haven-based Ulbrich Steel. Their aim was to purchase the 40-year-old business and keep it running as a banquet center, which they would later rename MountainRidge.
What happened next is this: Vrabely, Ulbrich and another investor, Scott Williams, paid nearly $1.7 million to buy the facility at auction, which they believed included all personal property on the site. When it came time to finalize the deed and take possession of the facility, however, most of the personal property — chairs, tables and other necessary event-staging materials — had been removed.
Vrabely, at a recent hearing of the General Assembly’s Banks Committee, said the dollar value of that removed property was “significant.”
They later learned that despite written documentation to the contrary, the property was owned by a third party and should not have been auctioned off as part of a sale of the facility.
This all transpired because of a time delay in state law where a month or more can elapse between when the price of an auctioned property is set, and the time a buyer actually takes possession of it.
Lawsuits were filed. Cross-lawsuits were filed.
Here’s where the manufacturing insiders’ club gets involved. Vrabely and Ulbrich are good friends with a Waterbury manufacturer-moonlighting-as-lawmaker: State Rep. and Assistant Republican Leader Selim Noujaim.
When not in Hartford making laws, Noujaim owns and runs Noujaim Tool Co. Inc., a machine shop in Waterbury. It’s through the family business and mutual affiliation with the Small Manufacturers Association where the three men became friends.
As friends do, they got to talking business. Vrabely told him what happened. Noujaim got an idea.
“It’s not that unusual, really,” Noujaim said. “Lawmakers are really reactive, not proactive. When someone has a problem, that’s when we start to look for solutions.”
Noujaim’s HB 5164, would change state law to protect buyers of commercial property. Under current law, buyers like Vrabely and Ulbrich set an unchangeable purchase price when they buy a property at auction. The proposed change would allow buyers to adjust or renegotiate the purchase price if something changes with a property between the time it’s auctioned and the time new buyers close on it.
The bill thus far has faced no opposition.
Whether or not it passes, one thing is clear: If nothing else, the bill’s mere existence is testimony to the strength of the ties between members of Connecticut’s manufacturing club.
Freelance writer Ken St. Onge blogs about manufacturing at NutmegMachine.com.
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