Finance committee backs $80,000 settlement to release Nielsen from liability on two defaulted EDLF loans

The Troy Finance Committee recommended that the city council accept an $80,000 settlement with Jessica Nielsen to release her from personal liability on two defaulted Economic Development Loan Fund (EDLF) loans to AM Scott Distillery LLC and requested emergency legislation to finalize the release.

Grant Kerber, Troy law director, told the committee that other parties tied to the loans are in bankruptcy and that the city has filed a proof of claim and is participating in the bankruptcy proceedings. "There was one other guarantor and one the actual party that the money was lent to. Both of those entities are in bankruptcy at this point in time. The city has submitted a proof of claim and is participating in those bankruptcy proceedings," Kerber said, and he added that releasing Nielsen would not further diminish the city's ability to collect beyond what has already been diminished by the bankruptcies.

Committee members praised the loan review committee's vetting and described the settlement as a reasonable recoverable outcome. A member asked when Nielsen would pay; Kerber said the timing was not fixed in the legislative record but that discussions between Nielsen's attorney and city staff indicated the payment could arrive in short order after the legislation's effective date and could be a lump sum.

Committee members again expressed support and moved unanimously to forward the settlement recommendation to council with a request for emergency consideration. As with the other committee recommendations, final acceptance and any release language are decisions for the full city council.