City of Danville files suit against companies backing

DANVILLE (WSLS) City officials in Danville have filed two lawsuits  against GOK international and WebParts, the companies the city said were supposed to bring over 500 jobs to Danville. 

The Tobacco Commission gave the city $2 million in grant money to bring the companies in. Now, City Manager Joe King said Danville is responsible for repaying that money. 

The lawsuits state in early 2012, the city gave $1 million to GOK International and Web Parts. Those are two companies the city felt positive could bring jobs to Danville. 

In return, both companies promised to make several millions of dollars in investments and bring in over 500 high-paying jobs to the area within three years.

The city manager said, within two years, both companies filed for bankruptcy. 

"It hurts, every dime we spend repaying the tobacco commission could have been spent for other things other economic development expenditures or any other government expenditures so it hurts so we'll have to draw down on our cash reserves being able to do that
over a period of time over a period of three years" King said. 

King says the city is required to have 20 percent of it's operating budget in reserves, just in case an emergency happens. He says $20 million has been set aside. Part of that money will go towards repaying the Tobacco Commission. 

King says this is a lesson learned and city officials will do a more thorough check to make sure companies are able to bring economic growth to Danville. 

The city will decide Tuesday, Oct. 21 how they will move forward with the lawsuit. 

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