Spilman represented a public lending agency in a private arbitration with an industrial renovation company regarding a dispute over the valuation of certain industrial property in north central West Virginia that is presently under contract for sale to an unrelated third-party.  This dispute stems from a $15,000,000 loan made by the public lending agency to the industrial renovators that went into default in 2019. The public lending agency’s loan was secured by liens on the property. Instead of exercising its foreclosure rights, the public lending agency entered into an agreement with the industrial renovators wherein the public lending agency would retake title to, remediate existing environmental issues on, market, and then sell the property. Under this agreement, if there was any "residual value" remaining after "outstanding indebtedness" was subtracted from the property's "aggregate value," then the public lending agency agreed to remit that residual value to the industrial renovators.

In September 2022, the public lending agency notified the industrial renovators of the pending sale of the property to the unrelated third-party, and informed them that the outstanding indebtedness (which included the loan default and environmental remediation costs) exceeded the aggregate value (meaning that the industrial renovators would receive nothing from the sale of the property). The industrial renovators disputed this calculation and claimed instead that the public lending agency had violated the agreement and asserted further that it was owed approximately $38 million, in addition to attorneys’ fees.  The case was tried over the course of two weeks in December 2023/January 2024, and the parties completed post-hearing briefing several months later. The arbitrator issued his award in late October 2024 and entered a complete defense verdict in favor of public lending agency, finding that it did not breach the agreement and that the industrial renovators were owed nothing because the outstanding indebtedness greatly exceeded the property’s aggregate value.

This was a highly complex case involving competing commercial real estate appraisals, numerous aspects of state and federal environmental law and regulations, and thousands of pages of trial exhibits.  Moreover, it took untold hours to prepare public lending agency’s witnesses and third-party witnesses for trial.  The effort paid off in the end as the arbitrator ruled in the public lending agency’s favor on virtually every single factual issue that materially affected his ultimate judgment. This is a fantastic result and a tremendous relief for the public lending agency.

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