An article in the Washington Post has escalated the battle between Ace Hardware and a group of former members who claim they were misled by the hardware co-op’s sales projections and other financial data. Joining the fray is Rep. Gerry Connolly, (D-Va.) who has sent a letter to the Small Business Administration, asking for a “robust investigation” into the complaint of Fischer Hardware, a Springfield, Va., dealer in his district that claims to have taken out $1.85 million in loans based on allegedly inflated revenue projections provided by Ace.
Pattie and Roy Ewers bought Fisher Hardware in late 2008, opened a Vision 21 Ace store in January 2009 and declared Chapter 11 bankruptcy protection in April 2012. In addition to the complaint filed with the SBA, they have filed a lawsuit against Ace Hardware. The store is still operating and is now supplied by Memphis, Tenn.-based distributor Orgill.
A copy of the Congressman’s letter provided to Home Channel News by Rep. Connolly’s office never mentions Ace Hardware. Instead, it asked for an investigation of the “lender,” who may have “willfully manipulated figures and business projections in order to justify inflated values, which were then used to qualify for loans” that were ultimately guaranteed by the SBA.
The letter also mentions numerous lawsuits filed around the country similar to this complaint. “This is not an isolated case, but appears to be a pattern that needs to be addressed,” the letter states.
Sasha Bigda, director of corporate communications for Ace Hardware, told Home Channel News that: “Our understanding is that Congressman Connolly recently asked the Small Business Administration to investigate the practices of some lenders under SBA loan programs. Ace Hardware Corporation is not a lender under any SBA program. The SBA has not contacted Ace about any investigation concerning any SBA loan program, nor has any other government agency done so.”