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Seven Falls insurer must pay bond, appeals court says

A North Carolina Court of Appeals ruling could mean that Henderson County will receive a bond payment resulting from the failure of the Seven Falls development to make improvements.

An appeals court upheld Henderson County's trial court victory against Lexon Insurance Company, which had posted a $6 million bond backing the agreement by Seven Falls LLC to make improvements (primarily road, water and sewer) within the suspended golf course project.
In Synovus Bank v. County of Henderson and Lexon Insurance Company, the appellate court rejected Lexon's argument that it did not have to make good its surety bond, County Attorney Charles Russell Burrell said.
The County sought payment of the $6 million from Lexon when Seven Falls failed to make the improvements as required under its agreement.
Work on the subdivision stalled in 2009 when the real estate market collapsed, and developer Keith Vinson faces state charges arising from his failure to pay certain withholding taxes.
Lexon claimed that it did not have to pay its bond because of North Carolina's Permit Extension Act, which extended certain government permits. The Court of Appeals ruled that Lexon's private contract with the County was unaffected by a legislative extension of a subdivision permit.
Lexon's may seek further review from the North Carolina Supreme Court. It was not known on Wednesday whether the insurance company would take that step.