Former EF Hutton suspends operations, in $12 million debt

A financial firm that moved into the largest building in downtown Springfield and promised to create more than 400 jobs has ceased normal operations as it tries to settle debt greater than $12 million.

Hutn Inc., formally known as EF Hutton America, said that it is seeking ways to restructure the company’s finances and “stabilize the company’s financial condition.” One of the ways of doing so is by identifying “potential merger partners and/or acquirers for selected company assets, and to attract additional tenants for the company’s 1 Main Street property,” the company said in a news release.

The company is also without a CEO.

Hutn Inc. announced the resignation of CEO and interim CFO Christopher Daniels. He had been the CEO since the company moved to Springfield in 2016 and had been with the company since 2014.

Additionally, none of the company’s websites are operational. A visit to results in an error page and results in the user seeing a webpage.

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Daniels declined to comment for this article and said questions should be sent to the board of directors. The Springfield News-Sun also attempted to reach Stanley Rumbough, a director of the company, and Charles Winburn, a former Cincinnati City Councilman and a member of the Hutn Inc. board. Neither responded.

Also, Dimas Law Group, who issued the press release, declined further comment when reached.

Hutn, Inc. said they plan on hiring a new CEO soon. It is unclear who is running the company currently.

The firm is a financial services company that opened in the former Credit Life Building, a building it acquired as part of its deal to locate in Springfield. The company changed the name of the building to EF Hutton Tower and changed the address to 1 Main St. Its subsidiaries include EF Hutton Inc. and Megga Inc.

On top of the latest developments the firm was recently sued by a California employment agency, according to court documents obtained by the Springfield News-Sun. The lawsuit accuses Hutn Inc. of not paying for services rendered and unjust enrichment.

Debt reaches into millions

EF Hutton has accumulated millions of dollars worth of debt in its first 2½ years in Springfield.

For instance, the company owes millions of dollars to local non-profit SpringForward and to real estate investment company Peer Street, according to Dimas.

“The company is in discussions with both PS Funding, which holds a $4.65 million mortgage on the Company’s building at One Main Street, Springfield Ohio, and SpringForward which holds a $7.5 million unsecured Note from the Company about restructuring both those obligations and curing its current defaults under them,” according to Dimas.

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SpringForward Executive Director Ted Roest said the money owed to the non-profit is payments on the 1 Main Street building. EF Hutton America purchased both the tower at 1 Main St. and the State Theater, 9-17 and 19 S. Fountain Ave., for about $8.4 million from SpringForward, according to Clark County Auditor’s Office property records.

Former owners of the buildings, Jim Lagos and his wife, Nike, gave the properties as a charitable donation to SpringForward with no strings attached, Jim Lagos previously said.

SpringForward’s mission is to target investment in downtown Springfield’s core to attract new businesses and visitors to the city.

SpringForward sold the buildings to EF Hutton America on Sept. 2, 2016 — the same day it was donated to the non-profit, according to the Clark County Auditor’s website.

Roest said SpringForward owns about $1 million in the company’s stock which was given to the non-profit as part of the original agreement.

Roest declined to say whether any of the money had been paid back by the company and declined further comment as the two sides are still in negotiations.

Last month, the Springfield News-Sun uncovered thousands of more dollars owed by the company to local and state government. Many of the debts are still delinquent.

The company owes Clark County more than $67,000 in property taxes overall, including $58,857.76 on EF Hutton Tower, one of the most prominent buildings in downtown.

READ: Springfield wants information from EF Hutton before releasing money

“These delinquent taxes consist of second-half 2017 taxes payable in July 2018, penalty, Dec. 1 interest, first half 2018 real estate taxes due Feb. 15, 2019, and penalty,” Clark County Treasurer Stephen Metzger said in an email.

The company also owes more than $8,500 in taxes on the State Theater property, Metzger said.

The Ohio Attorney General’s collections department also issued a lien against the company for more than $600 owed to the Ohio Department of Job and Family Services for unemployment taxes.

The company was behind on water and sewer bills at both of its Springfield properties, city Utility Billing Manager Andrew Luttrell said, but those bills were paid in full, recently.

The company said it is working to pay back some debts, but didn’t specify which ones.

Staffing agency files lawsuit

EF Hutton was sued for more than $28,000 by California based Creative Circle LLC in Clark County Common Pleas Court, according to court documents.

The lawsuit accuses EF Hutton of not paying for services rendered and “unjust enrichment.” Creative Circle is an employee recruiting agency, according to their website. An attorney representing Creative Circle did not return a phone call seeking comment for this article.

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“Plaintiff and defendants had business transactions between them and agreed upon the resulting balance due,” the lawsuit says. “Plaintiff tendered a statement of the balance due to the defendants and the defendant did not object to the statement.”

But the money was never paid, the lawsuit says.

“Defendants have knowingly accepted and received goods and/or services valued in the amount of $28,359.58 without making payment and have been unjustly enriched,” the lawsuit says.

The lawsuit asks the local court to order Hutn Inc. to pay back the $28,000 with interest and any other relief it may deem just and equitable.

Jobs fall short of promise

Officials gathered in front of EF Hutton Tower when the company first moved to Springfield and celebrated the financial firm as the breakthrough the city needed.

EF Hutton promised to bring 415 jobs over a five year period, which would likely prompt growth throughout Springfield and especially in downtown.

However, Hutn, Inc.’s filings with the city show the company hasn’t come close to fulfilling that promise so far.

Hutn, Inc is obligated to file an employee incentive agreement form with the city every year to show its progress and to receive incentive money. The first filing sent to the city in early 2017 — representing the year 2016 — shows the company started with 11 employees with a total annual payroll of $88,284.

The next year, the company filed another reporting form which said in 2017, it hired 60 employees. The form says the company had an annual payroll of $1.3 million and the new hires accounted for $1.1 million.

Earlier this year, the company said in its newest filing that it hired 32 employees and had a payroll of $1.75 million. However, a line that asks how many current employees are working at their facilities is left blank.

The company also said it invested more than $200,000 into their buildings.

$4.65 million: mortgage that PS Funding has on Hutn, Inc. building at One Main Street.

$7.5 million: unsecured note Spring Forward holds from Hunt Inc.

$67,000: unpaid taxes to the county by Hutn, Inc.

Springfield News-Sun:

The Springfield News-Sun has closely tracked the development of HUTN INC. and its subsidiaries since the company first announced its move to downtown Springfield in 2016, including stories examining its possible impact on downtown and its new products.

EF Hutton/Hutn Inc. time in Springfield

Sept. 2016 — EF Hutton America moves to Springfield promising more than 400 jobs over five years.

Nov. 2016 — EF Hutton America launches stock trading website.

Feb. 2017 — EF Hutton America announces expansion into mobile phone industry.

Oct. 2017 — EF Hutton America changes name to HUTN, Inc.

Nov. 2017 — HUTN, Inc. launches Meggalife websites.

Feb. 2018 - HUTN Inc. obtains a $4.65 million mortgage on EF Hutton Tower.

Sept. 2018 - HUTN, Inc. announces that it plans on raising $60 million by issuing cryptocurrencies.

Oct. 2018 — The Springfield News-Sun reports HUTN Inc. is under investigation by the Security and Exchange Commission.

March 2019 - The Springfield News-Sun reports all of the company’s websites are down and that the financial firm is behind on its taxes and water bill.

April 2019 - The company announces it has ceased normal operations and CEO Christopher Daniels has resigned.

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