PUNXSUTAWNEY — Punxsutawney Borough Council voted 6-1 to begin legal action to foreclose against Stello Foods Inc. of Punxsutawney for being delinquent on its payments earlier this year to the borough's Economic Loan Fund.
Nick Stello, president of Stello Foods, spoke to council during the meeting, and during an executive session he spoke with the media, saying that with council acting against his company, he'll be forced to declare bankruptcy.
"The decision by Borough Council will force Stello Foods into a bankruptcy situation — I'll have no choice," Stello said, adding his company doesn’t have $200,000 to pay on the balance of the loan.
Stello said he currently employs 35 people between his two locations: his manufacturing plant on Pine Street and his warehouse located behind the post office, and both buildings contribute to the borough's tax rolls.
Stello said the fund did its job; it created jobs and helped the local economy.
"It helped us get it started, and now it's going to put us out of business," he said.
Stello said the Economic Loan Fund means nothing as far as the how the borough functions or in regard to borough monies.
"This was an independent Economic Loan Fund set up for manufacturers in the town of Punxsutawney," Stello said. "Basically, council has decided to put us out of business.”
"We've tried to meet our obligations and continue to do so," Stello said, adding that council sent him a proposal, and he actually gave the borough more money than was requested from him.
"Everyone is going to lose here; the only person who will benefit will be Jay Lundy, the borough solicitor, because he'll make all the money as we go through the bankruptcy proceedings," Stello said.
Following an executive session, Larry Chenoga, Council president, said council will take everything Stello said at the meeting into consideration.
"That is all the comment we're going to make at this time," Chenoga said.
During the solicitor’s report, council voted 6-1 to proceed with foreclosure proceedings against Stello Foods, with Bill Spencer voting no, and Story, Santik, Chenoga, Porada, Sherry and Lorenzo voting yes.
Following the vote, Stello said he was in shock.
Lundy said the reason for the foreclosure is that payments were not received as asked.
Links:
[1] mailto:lmcguire@punxsutawneyspirit.com
[2] http://www.punxsutawneyspirit.com/sites/default/files/100912 Nick Stello.jpg
