Green seeks clarifications in Johnson's ruling

By Thomas Wilson
STAR STAFF
twilson@starhq.com

In a letter addressed to Chancellor Richard Johnson dated July 11, Charles K. Green says he wishes to clarify statements included in Johnson's ruling issued last month that awarded the city of Elizabethton $3.4 million from North American Fibers, Inc. (NAF).
Green states he wanted to clarify items Johnson made in his decision regarding the company's $5 million liability reserve established in 1997; the North American board of directors; and property purchased by North American and two other investors from Green's wife Patricia Green.
On June 24, Johnson ruled the landfill unreasonably burdened the city's main interceptor sewer line easement and violated the city's easement grant to access the sewer line. He awarded the city $3.4 million in damages to cover the city's $1.1 million construction cost plus $2.3 million in interest the city would pay over a 29-year period on the loan used to fund construction of the sewer line.
The letter written and signed by Green states the $5 million reserve was required by the accounting firm of Ernst and Young to certify North American's financial statements. In his decision, Johnson wrote no money was placed in the fund, and he termed the $5 million was a "paper fiction."
Green writes the company in 1985 established a board of two inside directors and three outside directors, one of whom was a representative of the United Textile Workers. The board's make-up remained the same until 1992 when the UTW representative left and was replaced by an elected member of hourly employees, according to Green.
Several outside directors resigned from the board in 2000 for "various reasons", according to Green. He writes that the company currently has three directors -- two inside and one outside.
Regarding the property purchase, Green states he acquired 50 percent of undeveloped property -- that is the present day Stonebrook subdivision -- purchased in his wife's name and with her personal funds. He writes that in the process of acquiring this property, he was looking for additional investors.
Green states that he later approached two individuals, "they being Joe LaPorte, President of Citizens Bank and Sam LaPorte, who is an attorney and also the mayor of Elizabethton and acquiring part of this property."
He further writes in the letter that both " ...the LaPortes acquired a portion of the subdivision, the same as North American." Green notes approximately 50 percent of the subdivision lots have been sold. He says the point of his explanation is to point out there was "nothing shady" about the transaction.
"North American's counsel should have done a better job of explaining the above issues," Green states in the letter.
When contacted by the Star on Monday, Johnson said he has not received the letter and could not comment on any case that remained pending in his court. Green could not be immediately reached for comment on Monday night.
NAF has 30 days from the date of the ruling to appeal the case to the Tennessee Court of Appeals. The attorney representing NAF -- Stephen G. Anderson of Baker, Donelson, Bearman, Caldwell, & Berkowitz law firm in Nashville -- said Monday afternoon an appeal in the case had not been filed.
Anderson added that he expected to file a motion on behalf of the company that would allow Chancellor Johnson to "correct errors" the plaintiffs felt were made in his decision prior to filing an appeal. Statute also gives the plaintiffs 30 days to file a motion requesting amendments to the decision.
The city filed the lawsuit against Green, individually, and several companies, in August 2000, alleging that a fly-ash landfill located on NAF property was blocking one of the city's main sewer lines.
Johnson issued the decision six months after a three-day court trial in December.
Elizabethton City Manager Charles Stahl said Monday that the city's lead attorney Charlton DeVault did an "extremely thorough job researching the facts of the issues and presented the city's case to the court in a very detailed manner.
"The facts of the case speak for themselves," said Stahl.
Neither Green himself nor North American Rayon Corp. were found liable as defendants under Johnson's order. Green is president and chief executive officer of North American Fibers.