Friday, January 16, 2009

Std-Ex: Bankruptcy May Not Affect Gadi Leshem’s Ogden Project

But then again... it most likely will

The Standard-Examiner furnishes further information on the Leshem/Cover-All Inc. Bankruptcy story this morning, providing in the story's lead paragraph that classic Std-Ex Pollyanna spin:
OGDEN — City officials remain optimistic businessman Gadi Leshem will be able to undertake large-scale development downtown even though his California based carpet installation company has declared bankruptcy.
For starters, Mr. Schwebke dutifully provides Ogden Chief Executive Officer John Patterson's obligatory "optimistic" take on this matter:
The Chapter 11 bankruptcy filing earlier this month by Cover-All Inc. may give Leshem breathing room from creditors so he can focus on Renaissance Village, a commercial and residential development that’s part of the proposed Ogden River Project, John Patterson, the city’s chief administrative officer, said Thursday.
“He (Leshem) has given us assurance that this would not impact the River Project or his commitment to Ogden,” Patterson said of the company’s bankruptcy filing. [...]
Ogden Riverfront Properties is a separate legal entity from Cover-All and likely won’t be affected by the bankruptcy, Patterson said.
The best that Boss Godfrey can muster up is "hopefulness," which is a few clicks shy of optimistic, at least on our WCF B.S.-O-Meter:
Mayor Matthew Godfrey said he’s hopeful Leshem will be able to follow through with his development plans.
The city will have a better idea of whether the Cover-All bankruptcy will affect those plans later this year when Leshem is required to pay for the demolition of boarded-up houses in the river project area, Godfrey said.
What ought to be clear from these above statements is that neither of these Ogden City officials has the slightest clue whether Mr. Leshem's bankruptcy filing will impair Mr. Leshem's River Project. They're as much in the dark as anyone else, it would appear.

But interestingly, the ever-resourceful Ace Reporter Schwebke finally gets down to business, and drags out some revealing commentary from former Ogden Community Community and Economic Development Department Director Dave Harmer, whose view falls quite a distance from optimistic (or so it seems to us):
Leshem’s largest obstacle will be convincing skittish lenders to invest money in his project amid an economic downturn, said Dave Harmer, who retired in October from his post as the city’s community and economic development director.
“The biggest thing is the lending situation,” Harmer said. “Before he can do anything he’s going to have to secure financing.” [...]
In the past, Leshem has relied on Cover-All profits to help fund its investments in Ogden, Harmer said.
Assuming that Mr. Harmer is right, and that Mr. Leshem's further pursuit of his Renaissance Village Project will depend upon Cover-All Inc. "profits," we believe we can see where this story is leading. It's difficult to imagine that the revenue from a company which has $1 million in assets, and is upside down with its creditors to the tune of $42 million, would allow Mr. Leshem to qualify for construction financing, in this, or any other credit market.

Adding insult to injury, this morning's article reels off a list of other obstacles which don't bode well for Mr. Leshem or his troubled company, even assuming he is able to work out a viable Chapter 11 Reorganization Plan.

We don't know about the rest of our Weber County Forum readers, but for our own part... suffice it to say that we're not exactly brimming with optimism for the prospects of Gadi's Renaissance Village Project.

We'll even go out on a limb on this and hereby predict the imminent listing for sale of Gadi's fifty properties, under supervision of the U.S. Bankruptcy Court Trustee. If Gadi truly desires to save his company, the expeditious liquidation of these properties is by far the most logical approach.

Our compliments to Scott Schwebke, by the way, for digging out and providing for his readers a robust array of pertinent facts.

Reader comments are hereby invited.

31 comments:

Curmudgeon said...

With all due respect, Rudi, you're off base accusing the SE of "spin" on the story. It reported the Mayor's and other administration spokesmen's reaction to yesterday's news. The "spin" --- and, you're right, they're spinning like tops this morning --- came from them, not the SE. And as you note in your final line, Mr. Schwebke provided a good deal of information readers needed to identify and recognize the spinning. I think, in going after the SE in your opening line, you confused the messenger with the message.

The comments by Godfrey, Paterson and Harmer [reported in the story] sound very much like whistling past a graveyard in hopes it will drive the scary things away. Though I did notice that they're hedging their bets, including in their comments the downside potentials. It's Harmer who pointed out that Mr. Lesham's been funding is Ogden operations out of his flooring company's profits [now non-existent], and that he's going to have some difficulty raising funds in this market for his River project. The Harmer statement is much less pollyanna-ish than were used to getting from the Administration. Seems at least some of them have decided it's no longer wise to pretend they don't see the elephant in the room.

Good story, reporting spin, not engaging in it.

RudiZink said...

I stand by my introductory statement. I continue to believe that the headline and lead paragraph were a trifle "soft."

A better headline perhaps:

"Ogden officials 'whistle past the graveyard,' despite the grim economic reality"

Of course, that's just me. ;-)

I'm definitely proud of Mr. Schwebke this morning however.

Best danged story he's written in quite a spell.

RudiZink said...

One more thing, Curm. It was a pleasure to be treated to Mr. Harmor's newly found candor, now that he's been untethered from his C&ED role.

(What he's suggesting is that Mr. Leshem has a near impossible hill to climb.)

No?

althepal said...

Suggested substitute headline:

"The Godfrey Administration: A Case Study of Delusional Behavior"

dan s. said...

It's a very good article, if you read the whole thing. But the Standard-Examiner is complicit in the spinning in the headline and opening sentence. That sentence should have said: "City officials say that they remain optimistic..." A subtle difference, to be sure, between stating as fact that they're optimistic, and stating that they say they're optimistic. But it's hard to believe that deep down they're really optimistic, so the distinction is important.

oldtimer said...

Mayor Godfrey never quite gets the facts straight with his story about the facts.

Just like he never got his personal financial report for the last mayoral race to jibe with the true facts regarding his finances.

Dorothy Littrel and her 60 co-plaintiffs tried to get the facts out in court by filing their suit against Matthew Godfrey and the Ogden City Attorney and the Ogden City Recorder and were shot down big-time by ex-judge Parley Baldwin.

Godfrey has people in high places who are willing to cover for him.

We know that the City Attorney and the City Recorder did his bidding in order to keep their jobs but why in the world did Parley Baldwin let his old boy Mormon Bishop ethics be perverted into covering for Godfrey?

Sue said...

"Denial: Not merely a river in Egypt"

What will it cost us said...

The best bet for the city is to demolish the homes, lien the property, and at least mow the weeds down come spring.

What operations have been funded by Gadi here in Ogden except to purchase the properties? Not paying 2008 taxes, no fines from the enforcement office for weed control and abondoned buildings with hazardous waste left behind. Where is his profit from selling his property to Wal-Mart?
I suspect it was ferreted out of state post-haste? There should be a money trail especially if he claims he only has $1M in asetts, $24M debt to creditors, $18.6M owed to the IRS, CA Insurance fund and a promise to pay for his insurance fraud case.

Bouncing $100K in payroll checks will really help his credit rating.

His grinning picture in the paper is disturbing.

Of course the city paints a rosy picture optimistic that the ecomomy will recover while they are still employed.Why wait until the end of the year. The city needs to act now, how many more years can eyesore fester in the city without being taken care of?

How many years have we waited for the ecomonic boom come back to Ogden? Does the city get money back from the Winsor Grant in March? Will the Star Noodle be renovated? Will all the homes Provident manage be maintained or fined by enforcement office?

Will they raise water rates again? Will Gold's move back to their old building on 25th?

Lots of questions for the new year.

It slays me that the city bends over backwards with tax money for millionaires or tax breaks for Wal-Mart yet doesn't do anything for local older in town businesses.

Slum lords should be identified and fined, especially if out of state owners that don't care about Ogden. The mayor has some rentals, where does he fit in with enforcement?

Northerner said...

Points:

1. The administration says, Filing bankrupctcy gives you "breathing room from creditors".

2. Harmer says Leshem only needs to "secure financing".

So . . . while he's SHAFTING his LAST creditors, he's looking for some NEW ones???? This means, "No problemo"???

And yes, securing funding is usually a problem. Two years in and lots of hullabaloo later, perhaps Gadi shoulda thoughta that before now!

Bill C. said...

Am I reading this right? gadi used profits from Coverall to buy land in Ogden, but Coverall is 40 million in debt. Should I interpret this to mean that what gadi considered profits were in fact monies he should have been paying his suppliers and taxes? What profits?
Sad thing is that once again lying little matty's rooting for a charactor of very questionable ethical and moral make up. This time he's putting the City in that same sort of circumstance.

OgdenLover said...

Someone who would pay his employees with $100,000 in rubber checks is certainly not the kind of person we want investing in Ogden's future. What a scumbag!

But then we sorta sensed that already. Leshem is just the kind of guy Godfrey would gravitate to.

Machster said...

An alternative SE headline: "Ogden River Project? Stick a fork in it, along with most Mayoral initiatives"

The alledged (and seemingly true) cynicism and mean spirited attacks against the Godfrey administration on this blog are in fact being proven prophetic. They indeed are based upon well meaning and frustrated folks who genuinely care about Ogden and its future. Only the meek spirited and "Oh my heck" crowd generally cower in shivering drawn shades of gray when "an opinion...God forbid! is expressed openly in this backwards culture". As one author and accurately reported.

The collective wisdom of most who participate on this blog should serve perhaps as an inspiration to revitalize the Town Hall format in municipal government. Where issues and decisions get critical scrutiny they deserve, especially when resident tax dollars and quality of life judgments are being decided.

Mayor Godfrey, his apparent hubris, and penchant for leading; using his training from the model of his "mystic" religion, has once again reminded us of why our forefathers left England and its monarchy. And it should remind us of why so much of our early American history was tied to avoidance of oppression and rule by a few, without a clue about what is best for the people.

Let "Charlie" T. put that in his Wasatch Rambler pipe and smoke on it for a while.

This blog is rapidly replacing my enjoyment of a daily paper over coffee (Oh my heck! Coffee!). I now put the laptop where all the useless and annoying Realtor ads and non news "fluff pieces" used to clutter the table.

The SE is rapidly becoming just another "Mormon rag" without investigative reporting or dealing with any contentious issues relavant to our lives or our times.

So much respect for you who are actually doing what good journalists have traditionally done decades ago. Digging out the facts, presenting them and drawing relevance to our lives in the here and now. So plaudits and kudos to Rudi, Curm, Ozboy, Lionel, Bill C., Dorothy, Northerner, Ogden Lover, Sue, old timer, dan s, althepal, Tec J, and the hundreds who have contributed to better government, and therefore our life, liberty and happiness prospects.

MM
"an old codger, rampant and still learning"

Bill C. said...

Lying little matty's response to Schweke promts a couple more questions.
Is he talking about houses all ready demolished, that the bill won't come due for more months?
Is he suggesting that the City is entering the below competitive market demolishion arena as a favor for being his buddy?
Why, knowing that this guy is very unlikely to pay, quite current testimony to that, would the City invest doing the work in advance?
Again one has to wonder who's interests lying little matty is accomidating.

Rosmary said...

Bill,
You don't have to wonder. We already know.

ozboy said...

"Our fate is in the hands of a leader who makes a virtue out of avoiding reality"

Don't know who said it, but it sure fits the Lil Lord and his trusted side kick Patterson.

Another one that seems to fit these jokers is from Joe Klien:

They operate with a "combination of utopian fantasy and near criminal incompetence"

Dave the Journalism Student said...

Proposed "better" headline:

"Standard-Examiner copy editor adopts inaccurate headline to gloss over Godfrey administration malfeasance in the article below"

Proposed "lead line":

"Evil copy editor knows most readers don't read past the headline"

Sue said...

"What everyone needs to know about lying Godfrey Administration politicians"

???

Elder Benson said...

"Blessed Matthew Godfrey" lays his holy hands upon the gentile Isreali sinner Leshem, and pronounces "All is well".

REPENT! And obey God's TOOL on EARTH!

Hail (former bishop) and Blessed future LDS Church President Matthew Godfrey!

Woody said...

This version of this great song is much better, Elder Benson. It's much more appealing to our current 21st Century culture, in my opinion:

Come, Come, Ye Saints

Let's cut the religious crap, and appreciate great American folk music, which stands out by itself, against that of all other cultures.

Bill C. said...

Speaking of headline blunders, how's that mispelling of Shoshones today.
Dan and Rudi, I know my spelling is lacking, but I'm not being paid to do it.

Want to Know said...

Where's the producer Rupert now?

disgusted said...

the comment in the paper that gadi personally promised to pay the state of california compensation insurance fund back some $6.3 million would suggest that he personally guaranteed not the company to pay the fund that amount of money. that means he will need to satisfy the fund before he will have money for anything else. if he hadnt socked away a lot of personal money prior to this settlement and the company bankruptcy then we may be looking at personal bankruptcy soon to follow as well.

as i suggested before i am more concerned about what happens to the river property now. i for one would like to see the city buy back gadis interest. i suggest that the city take down the old houses but leave what ever trees are there and then put in a sprinkler system and plant grass. develop a nice big park that would be a great addition to the area until such time as it is developed. a park would be a lot safer and a nicer view for both the residents and visitors to ogden. the fact is that it could be some time before this project gets legs again.

Scam Buster said...

"Am I reading this right? gadi used profits from Coverall to buy land in Ogden, but Coverall is 40 million in debt. Should I interpret this to mean that what gadi considered profits were in fact monies he should have been paying his suppliers and taxes? What profits?"

Yes, Bill. Leshem apparently raided his own company to come up with the money to invest in Ogden. In truth, there were no profits derived from his "business."

This sort of behavior is typical, of course, of businessmen who have a history of raiding their Worker's Comp Insurance accounts, until they get dinged by State Insurance Authorities, as Mr. Leshem did, after which he was criminally charged by the California State Insurance Fund for failing to transfer insurance deductions to the proper authorities.

The IRS hasn't apparently (yet) gone after him, but people like Leshem also typically fail to conform to federal withholding and reporting standards too.

Yes, there's a consistent pattern here with Mr. Leshem, and people like him.

Scammers like this repeatedly make the same sorts of mistakes.

There are probably more problems with Leshem's company than have even been reported yet.

Bill C. said...

Kind of off the main topic but not really considering gadi's name and contribution on the list.
During the Ill. Gov's fiasco the idea of pay to play was discussed adnauseam. So I decided to pull out my copy of lying little matty's campain filing. Sure enough, everyone doing business with, or desiring to do business with the City was listed.
I mentioned earlier that I drove past the jackass center and noticed the flo rider out of commission. On the front of the boarded up window was a large R&O construction sign. R&O was a large contributor and I recall some questions arose because of how their contributions were reported.
Now some may call me paranoid among other things, but I drove by lying little matty's home today and low and behold, it looks like he's doing some major remodelling of his home. Many of the materials appeared to be similar to the type used in extremely wet enviroments, like the rooms at the flo rider facility. Call me overly suspicious but given his distain for honesty leaves plenty of room for questioning, I wondered if the timing of these two projects was pure circumstance. If it were Chicago, I could rest assure that the R&O bid included work on the mayor's home, but Ogden? I wonder.

Curmudgeon said...

Just to cut the endless stream of weeping and gnashing of teeth on this thread, there was some good news for Ogden in the SE today. The Pointe Theater is reopening. It's been bought and the new owners are renovating, and will open it as a discount theater. Lowering prices at the concession stand too, they say, to make it possible for families to see films without defaulting on their mortgages. The owners say that as a discount theater, it will not be competing with the first run multiplexes at the Junction and Mall.

Glad to see it opening again, and hope the new business plan succeeds.

Carpet Installer said...

As a carpet installer employed for Cover-All in Leetsdale, PA, I am very disturbed by the fact that Leshman is investing in another business transaction in Ogden, Utah. He has taken over $200,000 in our salaries from the month of December to assist him in paying off some of his debt. In order to avoid having to pay our salaries, he filed chapter 11. Since the filing, we have been notified that we will not receive our past paychecks. But he continues to pay us with rubber checks. I have not received a paycheck that has cleared since the beginning of December.

As far as Leshman paying back $6.3 million in workers compensation, I believe that is a lie too. Cover-All has now required all of their installers to pay at least $1500 in workers compensation. I guess he just passed the buck to us.

Throughout Leshman's history of CRIMINAL activity, he is a man not to be trusted. Only a CRIMINAL without a conscience can do the things that Leshman has done. Without a doubt, I am sure that this man can sleep at night even though none of us can. He has no regards for anyone but himself.

All of the subcontrators from Leetsdale, PA believe that this man should be thrown in jail for his CRIMINAL behavior.

Ogden, Utah BEWARE!

lionel said...

Rudi

Wow, has this blog grown or what? Apparently you now have carpet installers in Pa reading it! Or do you?

RudiZink said...

Here are Carpet Installer's WebStats, Lionel:

Referring Link: http://search.yahoo.com/search?ei=UTF-8&fr=ush1-mail&p=gadi leshem 2007&rs=1&fr2=rs-bottom
Host Name: c-24-131-xx-xxx.hsd1.pa.comcast.net
IP Address: 24.131.xx.xxx
Country United States
Region Pennsylvania
City Pittsburgh
ISP Comcast Cable Communications Holdings Inc
Returning Visits: 0
Visit Length: 3 hours 23 mins 9

Legit?

The carpet installer guy is posting from PA. This leads me to conclude that the post is most likely legit.

He found us via his yahoo search engine, BTW, as the "referring data" info shows above.

Full Disclosure: I've obliterated the last five digits in his IP addy, BTW... just so this whistleblower won't be identified and harrassed.

It isn't that the blog has "grown," Lionel. In truth, 2000+ posts in the last few years draws more hits from the search engines. we just have more articles that are "searchable."

Keep the faith... and keep on posting, people.

Believe it or not, we do make a difference!

lionel said...

OK Rudi, I'm gonna help on that:

Gadi, Gadi, Gadi, Lesham, Lesham, Lesham, crook, crook, crook, sleaze, sleaze, sleaze, scam, scam, scam.

Also think it kinda interesting that Rubert the sycophant has raised his weasely little head lately. Do you suppose Gadi turned a sharp corner and broke the poor suckups neck?

Bill C. said...

Rudi, if what you say is true, you've given lying little matty, potato nose, g-train, cavendish, the jackass and captain short deck of the now world famous squirrel patrol world wide notoriety, they're all probably famous now and owe it all to you.
It's like an evil look at the underbelly of Mayberry or something like that.
The WCF has done what their divinely inspired gondolas couldn't, put Ogden on the map.

Anonymous said...

Amazing. I spent 7 years as a manager for Cover-Ass... sorry, Cover-All... in the Northwest. You can be sure 'Carpet Installer' is legit, as am I and several other "disposable" prior employees of Gadi's. Ogden would do well to disallow ANY investment in Gadi or his cohorts. I left 3 years ago, started my own company, and have watched as his local "serviec centers" have dried up and blown away. They have no legs, they have been going down in flames for years, and yes, Gadi probably was "raiding" Cover-All to finance some new scheme.
I don't for one day regret the day that I left that company, with the exception that I have forgotten his email address...

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