Jefferson County company halts most operations
CHARLESTON, W.Va. — An Eastern Panhandle company partly owned by West Virginia’s venture capital fund has ceased most operations and dismissed all but a handful of employees as it seeks to reorganize or possibly be acquired by another firm.
Last week, STaSIS Engineering, a Jefferson County company that designs and sells high-performance components for luxury sports cars, was placed in an “administrative management holding pattern,” STaSIS officials confirmed Tuesday.
“The action that took place was part of a strategic plan and discussion for the company that had been going on for two months,” said Ted Rozsa, a Canadian philanthropist and STaSIS’ chairman. “We’ve put the company in an administrative management state. … We are doing that while pursuing strategic alternatives for the company.”
The West Virginia Jobs Investment Trust, the state’s venture capital fund, has invested $1.25 million in STaSIS and owns 11 percent of the company’s stock. Andy Zulauf, executive director of the JIT, serves on STaSIS’ board of directors.
STaSIS also has received $500,000 from the West Virginia Capital Access Fund. The troubled company has $2.5 million in low-interest loans outstanding with the state Economic Development Authority and Infrastructure & Jobs Development Council.
Rozsa and Zulauf would not comment on the reasons for the company’s financial problems Tuesday. Rozsa also wouldn’t say how many employees were laid off. At one time, STaSIS had 50 workers.
“I don’t mean to be coy, but talking about the specifics of the business operation, I don’t think it’s something we want to disclose,” Rozsa said.
STaSIS sells most of its components through Audi dealerships. On several online Audi-related message boards, STaSIS customers complained that Audi wouldn’t honor warranties on cars modified with STaSIS components.
Several message board posters also criticized the company’s management and products.
“It just simply goes with the business,” Rozsa said. “There are numerous people out there who look to badmouth a competitor and take advantage of situations that would appear to put them in a superior position.”
In 2012, STaSIS acquired a United Kingdom-based company, Revo Technik. Over the past year, Revo executives have managed STaSIS.
Recently, STaSIS reached an agreement to sell Revo, but the sale is on hold.
“All of the requirements under that agreement haven’t been met,” said Zulauf, whose agency invests state tax dollars in small companies that plan to expand.
STaSIS has a history of troubles. In 2012, the West Virginia Securities Commission started investigating a complaint that STaSIS executives misappropriated $10 million in shareholder and taxpayer investments, using the proceeds for “lavish lifestyles, large homes on golf course, expensive sports cars and large salaries,” according to the complaint.
Company officials said a former employee, Joel Schurtz, made the complaint as part of a “smear campaign” against the firm.
Last month, the Securities Commission concluded that there wasn’t “sufficient substantiation of violations” of state law. “The investigation is officially closed,” Rozsa said.
Also in 2012, STaSIS was thrust into a federal bankruptcy case because the company’s former vice president had financial ties to a convicted money launderer, Osama M. El-Atari, a former Virginia restaurateur serving a 12-year prison sentence.
A federal bankruptcy trustee overseeing the recovery and liquidation of El-Atari’s assets asked STaSIS whether the company would buy back more than 100,000 shares in company stock — valued at $250,000 — once owned by Mike Firetti, STaSIS’ former vice president of business development. Firetti was a business associate of El-Atari.
STaSIS officials said they didn’t know about Firetti’s ties to the convicted money launderer. Firetti has said he invested money for El-Atari but had no connection to El-Atari’s fraudulent dealings.
“Over the course of time, STaSIS has faced somewhat unusual and difficult circumstances,” Rozsa said Tuesday.
A year ago, former STaSIS CEO Paul Lambert stepped down. STaSIS’ chief financial officer, Todd Cope, also resigned last year but remains on the company’s board of directors.
STaSIS has few assets — mostly machinery, equipment and parts. The distressed company leases a facility at the Summit Point Raceway in Jefferson County.
The auto parts seller remains open with a skeleton staff, Rozsa and Zulauf said. No one answered the phone at STaSIS headquarters Tuesday, but the voicemail system was apparently still operational.
“We’ve retained sufficient accounting and sales staff to manage the company for a short time,” Rozsa said.
STaSIS has no plans to file for bankruptcy protection, he said.
“Obviously, that’s an option for a troubled company, but at this point in time, that is not something we are working on,” Rozsa said.
Selling the company remains an option, he said.
“We have been approached more than once over the past year with offers of interest in the company,” Rozsa said. “As a board, it’s our responsibility to investigate those, but there’s no ‘for sale’ sign hanging outside our headquarters.”
Reach Eric Eyre at firstname.lastname@example.org or 304-348-4869.