By Ron VandenBoom
Steve Faechner, owner of the Academy of Realistic Taxidermy (ART) has said he feels betrayed by Bear Paw Development Corporation because it did not follow through on assurances made to financially back the creation of his taxidermy school.
Melisa Jo Drugge, a a former employee and loan officer at Bear Paw Development who early on serviced Faechner's account, shares Faechner's sentiment.
"I don't believe your project was handled in the most prudent manner," she said in a letter sent to Faechner dated Sept. 30, 2000.
Drugge went on to say that she did not believe Faechner's project was handled in a timely manner and did not think that the project was represented to the committee members honestly.
Bear Paw Development officials have declined several opportunities to comment on the allegations. Bear Paw's attorney, James Kaze, citing a policy of confidentiality regarding borrowers' transactions also refused to comment.
The last paragraph of Drugge's letter states that it has always disturbed her that the loan committee's first response to the project was to approve it for financing for the school, and then, when the project was underfunded started to question the project's feasibility.
"Based on my experience," she said. "Feasibility is determined at the beginning of a project, not the middle.
Drugge is referring to a meeting of the loan committee that took place in September 1999, at which time they considered Faechner's request for $182,568 to finish the school. The committee denied the request citing a lack of project feasibility.
"All of the sudden the project is not feasible?" Faechner said. "It was two months prior."
In October 1999, the committee did agree to loan Faechner $44,000 for winterization a figure still far short of what was needed to finish the project and only served to drive Faechner further into debt.
By February 2000, Faechner knew he was getting financially behind and there was still no indication he would receive the money needed to open the school. Even with his tannery running at 100 percent, he needed to get the school open before he could even consider making payments on the money already borrowed.
Faechner had also received a foreclosure notice in December 1999 on his house in Havre that had been on the market for 1.5 years. A sheriff's sale was set for April 12, 2000.
Bear Paw Development would buy Faechner's Havre home for $43,216 at the the sheriff's sale $1 more than was owned on the home and $1,784 less than a signed buy/sell agreement Faechner had arranged with a buyer in March.
By April 2000, Faechner said he was feeling desperate and betrayed. No money had been received from the $150,000 Air Force grant Bear Paw had received in January for development of the two Air Force bases.
It was also in April that Faechner said he was told by Dick King, then executive director of Bear Paw Development, that it might be possible he could qualify for a Rural Development Rural Business Enterprise Grant (RBEG).
Drugge wrote the application on behalf of Faechner and gave it to King.
In her letter, Drugge states that she was told by King the application had been submitted and was going through the process of review.
Drugge would eventually call the state office concerning an unrelated item and in the process asked about the application. She was informed they knew nothing about it. Tony Preite, state director of Rural Development, called Drugge to tell her he had never seen the application and had never discussed it with King.
The application was eventually funded for $7,000. Still too little to assist Faechner in opening the school.
Faechner made a final pitch to Bear Paw's board of directors on June 14, 2000. By July 14, 2000, he was notified of the board's decision to uphold the loan committee's decision of no more funding.