The Jefferson County Industrial Development Agency will probably never get another penny back from a Watertown businessman who received a $40,000 loan in the fall of 2011.
Richard Lagano whose plan to start a used-car dealership, American Auto, in Watertown never materialized filed for Chapter 7 bankruptcy protection May 13 with the state Supreme Court in Jefferson County.
The Times previously reported that Mr. Lagano made three payments to the agency on that loan before abandoning his business plan in the spring of 2012. Around the time payments stopped arriving, he and business partner Rick D. Pitre opened Family Pizza at the Cheney Tire Plaza on State Street in April 2012. Though extensive renovations were made to the pizzeria, it closed less than a month after opening.
As collateral for the $40,000 loan, the agency has a second position behind MidFirst Bank to foreclose on Mr. Laganos house at 313 Franklin St., Brownville, according to records filed with the U.S. Bankruptcy Court, Syracuse.
Records show Mr. Lagano owes a combined $156,932 on three mortgages for the house, which is valued at $119,048. Including the value of his house, Mr. Lagano has $151,446 in total assets, and $248,577 in liabilities. Liabilities include $6,502 in credit card debt.
Though Mr. Lagano is now employed as a salesman at Raymour & Flanigan Furniture, records show he is losing about $1,168 per month after factoring in his monthly income.
A meeting with creditors is scheduled for July 8.
The JCIDA had also accepted as collateral automotive equipment that Mr. Lagano claimed he owned.
But that equipment actually was owned by Shawn J. McMurray, a business partner at Mr. Laganos auto garage. Mr. McMurray won a civil lawsuit Jan. 13 to reclaim equipment Mr. Lagano refused to return, which included personal tools, three automobiles and a boat. He also was awarded a $50,000 judgment by state Supreme Court Justice James P. McClusky.
Because of the bankruptcy filing, JCIDA attorney W. James Heary said, its not likely the agency will get anything back on its loan.
We now have to cease all collection efforts, he said. After examining the filings, it appears (Mr. Lagano) has no assets.
The loan will likely be written off as uncollectible.
Along with the $38,227 loan principal owed by Mr. Lagano, the agency is owed more than $2,000 in accrued interest and late charges.