Pike County Judge-Executive Ray Jones, the former Kentucky Senate minority floor leader, said he is considering filing a lawsuit against the principals of a company that has failed to pay back $300,000 it has owed the county for years.
Jones’ position, first reported by the Appalachian News Express, takes a much harsher tone with the company than that of the previous administration, which refrained from filing suit in fear of bankrupting an economic development project promising jobs.
In 2014, RCC Big Shoal, LLC proposed building an industrial plant in Pike County that would turn natural gas into various liquid products, including specialty waxes and lubricants.
In August of that year, county officials agreed to loan the company $400,000, but two years after the loan was finalized, the company announced it was moving its planned operations to neighboring Floyd County.
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Since then, Pike County officials have debated whether to file suit — the county’s fiscal court at one time voted to sue RCC, but never acted on that vote.
The company paid back $100,000 of the $400,000 loan in 2018, but has since ceased payments to the county.
Jones said he will work with the company if the project is viable, but has requested they provide documents to support the company’s claims and said he wants the rest of the loan repaid by March 1.
“If it appears to me that it’s a legitimate deal, we’ll work them to help make it happen,” Jones said, adding that issuing the loan “was just an ill-conceived idea.”
Jones also said a company official told him that its two principals, Bill Johnson and David Farmer, have taken about $200,000 out of the company while simultaneously failing to make payments to Pike County.
If RCC files bankruptcy before March 1 and fails to pay the county back on its loan, Jones said he and other county officials will discuss whether to file personal lawsuits against Johnson and Farmer.
Neither Johnson nor Farmer responded to requests for comment for this story.
In June 2018, Johnson told the Herald-Leader the company planned to begin construction in fall of that year. The plant was scheduled to be operational by 2020.
Johnson’s statement came just after RCC announced it received a $325 million pledge from the New York investment group Y2X Infrastructure, a cryptocurrency-based investment company founded less than a month before it made its pledge to RCC.
Whether Y2X has made any investment in RCC or any other company is unclear. Y2X officials have not responded to requests for comment for this story, and the company’s website does not list any specific investment history.
Y2X’s investment model — a process called an “initial coin offering,” a cryptocurrency version of an initial public offering — has sparked warnings from federal regulators.
In December 2017, Securities and Exchange Commission Chairman Jay Clayton said initial coin offerings provide “substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.”
RCC has not yet begun constructing its gas-to-liquids plant.
Floyd County Judge-Executive Robert Williams, who took office Monday, said he has not yet had contact with RCC, but former Floyd County Judge-Executive, Ben Hale, who now works as director of the Big Sandy Area Development District, said a company official told him last week that the project is still moving forward, and that the company is working to lock down investments.
“I’m still hopeful for the area that that will happen,” Hale said.