County Executive Matt Meyer has killed a deal that would've converted collateral for "worthless" software from the company that aimed to create a Delaware stock exchange into penny stocks.
WDEL has learned Meyer won't sign the deal, despite bringing it forth to New Castle County Council, which voted affirmatively to authorize Meyer's signature.
"It came over from the administration, so I did assume--as I think all of us did--that he was truly considering signing it," said Councilwoman Janet Kilpatrick.
But Meyer confirmed Wednesday in an interview with WDEL that he will not sign the deal, despite county attorney Sanjay Bhatnagar saying at council's last meeting that he was under the direction of Meyer to move forward whether council voted for the deal or not.
"That's not accurate," said Meyer.
When pressed about Bhatnagar's comments which were made on-the-record, in a crowded room, Meyer said:
"I'll talk to him. I didn't see him say it, I'm not going to say he's incorrect...I wasn't there, I don't know."
Kilpatrick said she's since talked to Meyer and agreed with his decision not to sign the deal.
"If he wants it remain another person's agreement, and not his, I'm fine with that because I don't think we should have ever done it," said Kilpatrick.
Instead, the county will wait until its controversial $3 million loan is paid off, in full, by Ideanomics, which acquired the Delaware Board of Trade in May of 2019 and promised hundreds of area jobs in the deal.
"This whole deal's a scam. I don't care what the collateral is, give the taxpayers their $3 million back," said Meyer.
A potential bankruptcy would disrupt that plan. Kilpatrick said she doesn't support going to court to obtain the $3 million.
"If we go to court and we have worthless collateral, and a judge says to DBOT, 'You have to pay them back the $3 million'...and DBOT says, 'We don't have $3 million in cash to pay them back,' and the judge says, 'Give them the collateral'...then it's over with...and we would never have the ability to get $3 million back from them, so by holding off another year, I'm hopeful that the $3 million will come back to us."
The attempt to create the stock exchange was made under then-County Executive Tom Gordon. Meyer spoke out loudly against the plan in his successful bid to unseat Gordon.
"Nothing changed. They need to pay us our money back--that's the only way out of this," he said. "My administration had nothing to do with this, since day one, we're just trying to get out of this deal....it was an awful deal from taxpayers from day one. You will never see me or anyone in my administration giving money like that to a business."
"Since day one, I'm trying to get out of this...giving the taxpayers a Chinese penny stock is not the way out of it. The way out of is for them to pay us back $3 million."
Meyer said DBOT will be paid up by the end of 2020.
"There are a lot of things fishy about this deal...in fairness to DBOT, they have made every interest payment ever year," said Meyer.
Council voted to authorize the collateral deal at its last meeting 11-1. Council President Karen Hartley-Nagle was the lone dissenter, who at the time said:
"The county takes all of the risk and does not benefit for sharing that risk. I would still like to see Dr. Bruno Wu personally guarantee the $3 million loan if Ideanomics is unable to repay the loan when due, or see Ideanomics obtain a surety bond to protect the county and our citizens. Our constituents deserve no less."
Meyer said his decision not to sign the deal had nothing to with Harley-Nagle's vote.
"I don't know why she voted against it or what she said, to be frank. I just think, listen, it's clear, talking to nearly every member of county council...there was close to zero support by county council when this deal was consummated."
Kilpatrick agreed and explained why she voted affirmatively on the collateral deal.
"I guess I didn't feel that it was going to hurt anything, I felt from the very beginning that DBOT was not a credible company, and that we should have never given the money that we did....council voted against it, and [Gordon] went against our wishes. I felt like the collateral, software collateral, is worthless. I'm not sure Ideanomics is any more than worthless, but my thought was, if we have worthless collateral, we can have more worthless collateral, and we're not losing anything. My whole goal is to get the $3 million back."
"If the administration felt that it was OK to change collateral, I was fine with that, because I didn't think our collateral was worth anything."
Nonetheless, council members were surprised to see the administration no longer supporting a deal it brought to them.
"It was strange the way that it went down," she said.