Published: September 28, 2007 11:48 pm            

Waco Fire Department’s bankruptcy plan approved

The Waco Volunteer Fire Department has won approval of its debt repayment plan, more than a year after filing for protection from its creditors.

The non-profit organization’s creditors unanimously accepted the plan which was confirmed Sept. 19 by federal bankruptcy Judge Joseph Scott.

“We want the 6,000 people we serve in the Waco area to know that we will be there for them,” said WVFD spokesperson Patsy Woolum.

“WVFD will now be able to pay its creditors and eventually become debt free,” said its bankruptcy attorney, Ellen Arvin Kennedy of Lexington.

“I think this plan will allow us to work on regaining the people’s trust,” Woolum said.

The department gets most of its operating funds from the proceeds of bingo games conducted on Saturdays from 7 to about 10:30 p.m. at a hall on KY 52 near Waco.

Attendance at its bingo games fell off after the Madison County Board of Health’s ban on smoking in public places took effect in June, Woolum said. Attendance has started to improve in recent weeks, however.

The hall is available to community groups on other nights at no charge, Woolum said.

The department has more than 20 volunteer firefighters who meet for training every Tuesday evening.

WVFD filed for Chapter 11 bankruptcy in June 2006 after a creditor garnished its bank accounts, Kennedy said.

The department was then attempting to recover from the loss of $98,000 that had been misappropriated by its former chief, Roger Alexander, Woolum said.

A 2004 audit by the Kentucky Department Charitable gaming uncovered irregularities in WVFD’s finances. In February 2006, Alexander was convicted in Madison Circuit Court of three felonies and one misdemeanor in connection with the misappropriation. He was sentenced to five years’ probation and appealed the conviction. His appeal was denied April 2, 2007.

After Alexander was removed as its chief, WVFD discovered $30,000 in debt that Alexander incurred without authorization, Kennedy said.

WVFD also disputed a lease that Alexander had signed with Madison Development Partners LLC for a bingo hall in Richmond.

Madison Development Partners, owned by Earl Ray Neal and Rodney C. Davis, filed suit against WVFD after it refused to honor the lease on a new building constructed off the Robert R. Martin Bypass.

In its defense, WVFD said Alexander agreed to five-year, $5,000 per month lease without proper authorization from its board of directors.

In a January 2006 summary judgment, Judge William Jennings ruled that WVFD’s board and membership were fully aware of the lease negotiations and had attended meeting in which Alexander received authorization, even if formal notification of meetings had not been made.

WFVD appealed Jennings’ decision and did not honor the lease. Madison Development Partners then asked the court order to seize funds from the department’s bank accounts. WFVD responded by filing for bankruptcy.

Madison Development Partners subsequently leased the building to another tenant for $3,500 a month. The bankruptcy court held WVFD liable for $50,000, the difference in lease payments from the date of the building’s completion until action by the bankruptcy court.

Woolum said the department owes approximately $44,000 to Madison Development Partners, $37,500 in attorneys’ fees and $12,000 to suppliers.

The department’s bankruptcy filing listed mortgages of approximately $158,000 on its real estate.

Bill Robinson can be reached at brobinson@richmondregister.com or at 623-1669, Ext. 267.

        

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