Belly-up? The 13th Regional Corp. disappeared without explanation.
The employees have all been let go. The phones at its Tukwila, Wash., headquarters have been shut off. E-mails haven't been returned. Financial reports are months overdue. The Web link to its subsidiaries, www.Alindeska.com, is broken. Management hasn't been in contact with shareholders for months.
Online records in Washington indicate the 13th's corporate license expired in February 2008 and the corporation is inactive.
NO LAND FOR THE 13TH
The Alaska Native regional corporations were formed under the 1971 Alaska Native Claims Settlement Act, which divided 44 million acres of land and $962.5 million to settle aboriginal land. Twelve of the corporations are based in Alaska, but the 13th was created to benefit Alaska Natives living Outside the state. However, only the 12 Alaska-based corporations received any land. Besides not having a land base, the 13th was also ineligible to receive a portion of the millions of dollars in 7(i) revenue-sharing funds generated through resource development divided among the other corporations.
The 13th, then based in Portland, Ore., saw its incorporation delayed by a lawsuit until 1975. It was granted $54 million in startup money, half of which had to be immediately dispersed among its 5,500 shareholders.
The remaining $27 million was lost through a series of poor business decisions and bad luck. The 13th declared bankruptcy in the mid-80s. It slowly recapitalized and rebuilt its investment portfolio. It bought into the Mail Boxes Etc. franchise and a construction company, M. Kennedy Co. Revenue climbed into the millions.
Now, the doors of the main offices are closed, the shades are drawn and the offices are dark. Shareholders have been left in the dark, as well.
Debbie Kellogg has been working with a couple of fellow shareholders to try to piece together the puzzle of what happened to the 13th, "... which isn't easy to do since they don't have a phone numbers," she said.
Carl Hart has been posting open letters to 13th Regional officials, imploring them to communicate with shareholders, but has received no replies.
What they have found out is that the 13th lost millions of dollars in a failed business deal in 2004. Its main subsidiary, Alindeska Electric, reported $3 million in operating losses for fiscal year 2006. Other business propositions also faltered.
The 13th owes the State of Washington hundreds of thousands of dollars in unpaid payroll taxes, sales taxes, unemployment and workers' compensation fees. Washington has filed a lawsuit over the unpaid tax warrants.
The shareholders say they have had no communication from the board about the losses and lawsuits.
REAM LED CORP. TO SUCCESS
Yet just five years ago, the 13th Regional seemed to have found its footing after a rocky start and was riding a wave of prosperity along with the 12 Alaska-based Native regional corporations.
Norman Ream, former president and CEO, who led the company during a period of prosperity between 1995 and 2003, said he's getting all of his information from media reports.
"I'm not sure why everything went sour, but it did," he said.
A successful retired businessman, Ream led the corporation during a string of increasingly profitable years while accepting no salary. He left in 2003, vowing to help the corporation get the land base it had been denied 30 years before.
Now in his 80s, he's still working on the land issue, but said it's his only connection to the 13th. He even loaned the corporation $100,000 to further that goal, and hopes to get legislation reintroduced next year.
In the meantime, the corporation has gone off the radar.
Kellogg lives about 50 miles from the 13th's headquarters in Tukwila, Wash., and drove by one day to see what she could find out. The shades were drawn, the doors locked. On a whim, she knocked and was surprised when board member George Samuels answered the door.
They talked for about an hour.
"I asked a lot of questions but never got a whole lot of definitive answers," she said.
Kellogg said she's planning to contact Alaska's U.S. Senate delegation to try to get some help. "There's got to be someone to force them to respond."
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|Comment:||Belly-up? The 13th Regional Corp. disappeared without explanation.|
|Publication:||Alaska Business Monthly|
|Date:||Jan 1, 2009|
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