Business

Seven Falls insurer again appeals bond ruling

By Bill Moss, Published: September 20, 2012

The insurer that guaranteed the site work for the failed Seven Falls development filed a last-minute appeal that will prevent Henderson County from getting a $6 million check, at least for now.

The state Court of Appeals in August upheld a trial court ruling that would force Lexon Insurance Company to make the bond payment to Henderson County. Lexon had posted the $6 million bond backing the agreement by Seven Falls LLC to build roads and run water and sewer lines in the golf course project in Etowah.
Work on the subdivision stalled in 2009 after the real estate market collapsed. Developer Keith Vinson faces state charges arising from his failure to pay certain withholding taxes, according to court records, and he left a long line of contractors and suppliers who have not been paid.
Lexon claimed that it did not have to pay the 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.
"On the last day they filed for discretionary review by the North Carolina Supreme Court," County Planning Director Anthony Starr told Planning Board members Thursday.
The state Supreme Court can decide to accept a case or it can decide to let it stand. "The court of appeals decision was unanimous," Planning Board attorney Sarah Zambon said. "That's why we're hoping they won't hear it at all."
It'll the cost the insurer more if it ultimately loses. The clock is ticking at a statutory interest rate of 8 percent, piling up more than $500,000 worth of interest.