Though the 60-year-old Springfield institution is in bankruptcy, its lender, NCB of Arlington, has decided it is better to keep the store shuttered until its finances can be sorted out, owner Roy Ewers said Wednesday afternoon.
Roy and Pattie Ewers bought the store on Backlick Road from Dave and Wanda Fischer in 2009. They say they did so based on specific financial assurances from Ace Hardware that joining Ace’s “Vision 21” cooperative would be a profitable move, and Ace supplied documents to NCB to help the Ewerses obtain a $1.85 million SBA-backed loan. The Ewerses added $930,000 of their own.
The store’s sales plummeted, based in part on poor inventory management by Ace, Roy Ewers claims. When Ace sued Ewers for failure to pay, Ewers countersued, alleging that Ace defrauded him, and NCB and the SBA, by filing phony financial records and projections. Earlier this month in DuPage County, Ill., the trial judge allowed Ewers’s fraud charge to go forward, and urged Ace to settle, Ewers said. Ace said it hoped to prevail in the lawsuit. Other Ace store owners have filed very similar suits.
Officials for both the SBA and the Office of the Comptroller of the Currency said last week that they had open investigations into the allegations against Ace. But NCB “felt it was in their best interest to have us close until some sort of financial resolution is worked out,” Ewers said.
NCB, which promotes its financial support of cooperatives, did not immediately respond to requests for comment. Fischer has long been a fixture for Northern Virginians because of its knowledgable sales staff and diverse inventory. Ewers has been battling to keep the place open, and hoped a settlement with Ace would enable him to refinance the store.