In an illustration of what happens when economic incentives go wrong, the parents of Jacksonville City Councilwoman Katrina Brown jointly and separately filed Chapter 11 bankruptcy this week.
This filing by Jerome Brown and JoAnn Brown staved off a foreclosure hearing that was slated for a Jacksonville court on Monday, with BizCapital — the primary lendor and guarantor of a Small Business Loan — as the plaintiffs against the Browns and their businesses.
Back in 2011, the Browns, via “CoWealth” (one of their shell companies), got city of Jacksonville grants and loans and a Small Business Administration loan to establish a barbeque sauce plant in Northwest Jacksonville.
The money was contingent on the Browns creating at least 56 permanent jobs.
They fell just 56 jobs short of that number.
CoWealth originally borrowed $2.65 million from Biz Capital, in addition to $380,000 from the city of Jacksonville and $220,000 of grants, for the sauce plant. The city’s interest is subordinate to that of Biz Capital.
The Browns estimate that they have $500,001-$1M in assets, and $1,000,001-$10M in debts, according to the filing.
The Browns have dealt with unusual scrutiny, including an FBI raid on the warehouse in 2016.
Insulated from action by the Browns’ individual Chapter 11 filings, and Chapter 11s on their businesses: Councilwoman Brown herself, who was quietly removed from corporation paperwork as the legal maneuvering got serious months back.