December 24, 2003

Village files legal complaint against business over loan

The Village has filed a complaint against the owners of the Gypsy Café, claiming that the restaurant defaulted on its loan with the Village.

The complaint, filed in Greene County Common Pleas Court on Dec. 15, claims that the restaurant and its owners, Locksley and Guy Orr, violated the terms of their development agreement and promissory note, which the Orrs entered into when they borrowed $50,000 from the Village to start the Gypsy Café. The funds came from the Village’s Economic Development Revolving Loan Fund. The Village and the Orrs agreed to the loan’s terms around July 2000, according to the suit and documents included in court documents.

The complaint alleges that the Gypsy Café currently owes the Village over $49,660 on the loan. The Orrs have made over $6,000 in loan payments to the Village, but have also accumulated more than $5,700 in interest, the complaint states.

The Village has asked the court to order Gypsy Café to repay the Village its outstanding loan balance.

The Orrs and James M. Hill, the Beavercreek attorney representing the Village in this matter, gave strikingly different versions of the situation.

On Monday in separate interviews, Locksley and Guy Orr expressed surprise at the Village’s move. Guy said that the Orrs thought that they and the Village had a verbal agreement to resolve the issue.

The Orrs had proposed that they repay the loan by setting up an account into which they would directly deposit funds from Guy Orr’s salary, which he earns from a second job. The Orrs said that Locksley Orr had set up the account and had put money into it. “It was at my own initiative, not theirs,” she said of the Village.

Locksley Orr said that she had paid back some of the loan since they made their proposal. “We’ve made an effort to pay back the loan,” she said. Guy Orr said that they are “trying to deal with our responsibilities.”

“We’re not jumping ship,” he said.

Hill said that he did not know the Orrs set up the account and that the “Village is not accepting funds from Guy’s paycheck.”

The attorney also said that he and the Orrs never had an agreement, though he did say that they had discussed the Orrs’ payment proposal. He said that the Village indicated that it wanted a “forbearance agreement,” or an alternative agreement with the Orrs.

However, Hill said that the Village was not able to come up with an agreement with the Orrs stating how they would bring their loan payments up to date and continue future payments. “We were generally proposing an alternative payment plan that would fold most of the unpaid interest into a payment plan,” Hill said.

But that effort broke down, Hill said, when “the Orrs stopped communicating with us in terms of reaching an agreement” at the end of November. At that point, he said, “there was simply nothing else to do” but file the complaint.

Guy Orr said that he and Locksley have been communicating with Hill, but Locksley Orr said that they did not open the most recent correspondence from Hill because Guy Orr was ill. That correspondence, she said, contained a new proposal from Hill.

Council president Tony Arnett declined to comment on the complaint.

Village Manager Rob Hillard said that the Village “really tried to resolve this issue.”

“This was not what we wanted,” he said of the complaint. “However, we do have a fiduciary responsibility and we are holding it through our actions.”

The complaint also claims that the Orrs “misrepresented” how they would use the loan funds, noting that “the funds were not used for the purchase of equipment and other items.” The development agreement states the restaurant would use the funds to purchase a new heating and air conditioning unit, restroom equipment and other items, including a counter, cases and grill.

Locksley Orr called this a lie and said that she and Guy Orr had used the loan funds for the items listed in the development agreement.

Hill said that the Village included the claim in the complaint in an effort to “investigate the manner” in which the loan funds were spent.

Guy Orr said that he and Locksley have a positive outlook for the next year. “We have some different ideas that we’re going into 2004 with,” Guy Orr said. “We expect to be here.”

“We offer something that we think is not only for the community but I think it’s indicative of what should be in Yellow Springs,” he added.

—Robert Mihalek