ANNAPOLIS – Renato E. Ventura bought stock in Invest Maryland Corp. based on the advice of a trusted associate. But Ventura, vice president of Frederick-based Miscellaneous Metals Inc., is concerned about the future of a firm that he says has performed well short of his expectations.
“I’ve had nothing but a string of bad news as far as the way things developed,” he said.
The holding company, headquartered in Annapolis, incorporated in 1990 to start a chain of restaurants serving buffalo meat. But with Invest Maryland approaching its eighth year, Ventura is among several investors whose faith is shaking as the company accrues large debts and generates little revenue to service them.
Invest Maryland representatives, meanwhile, say they are doing the best they can with the bad hand they have been dealt, and must issue more stock and debt to get the struggling chain up and running.
Company founder Denis K. McLaughlin stepped down as chief executive early last year, after the Maryland attorney general took him to court alleging he had misrepresented his professional history and his own stake in the company. In settling the case, McLaughlin agreed not to sell securities in Maryland and to give up his financial stake in the company. The company also was told to elect a new board of directors.
Since the settlement, Invest Maryland’s new board has focused on generating new revenue to cover operating expenses and to launch the restaurant chain.
Invest Maryland had solicited at least $441,500 as of June 16, according to the records of the Maryland Department of Assessment and Taxation. The values of promissory notes held by 138 investors vary from $500 to $35,000, department records show, with most ranging from $1,000 to $5,000.
The first restaurant in the proposed chain, to be called “Buffalo Bill’s Wild West Show,” is nearing completion after two years of construction, said Invest Maryland attorney John Gordon.
“I would expect it will be open January or February, depending upon the weather” and its effect on the speed of construction, he said.
From the street, the Buffalo Bill’s restaurant site at 7352 Gov. Ritchie Highway in Glen Burnie appears to be almost done. The structure needs only cosmetic touches and some kitchen equipment; the driveway and landscaping look completely finished.
Even so, Edward W. Isaacs, a former Invest Maryland director who holds a $35,000 promissory note, said Invest Maryland Chairman Kenneth R. Ransdell is overly optimistic in hoping that the revenue from the notes will be sufficient to cover the restaurant’s operating costs.
“We made that statement in 1996 when we started issuing promissory notes – and here a year later, Mr. Ransdell is still saying this,” said Isaacs, a Riva resident who resigned his director’s position in August.
Records in Isaacs’ possession indicate that the company’s $441,500 debt had risen to $520,500 as of September. Invest Maryland also has issued stock valued “in excess of $3 million,” to about 900 Maryland investors, said Isaacs and his wife, outgoing Invest Maryland Secretary Alice Isaacs.
Ransdell and Gordon declined in interviews to provide specific information about the company’s finances.
Ransdell, of Clinton, insists that the Glen Burnie restaurant will be open for business shortly, but nevertheless acknowledged that things were moving slowly for Buffalo Bill’s.
He emphasized, however, that the current board has been charged with a double duty: undoing past damage and then building a successful business back up from scratch. Such an effort would take some time, he added.
Stakeholder David B. Bishop of Easton is confident that Ransdell and the new board will be able to reinvigorate Invest Maryland, even if it takes some time. In any case, the venture’s prospects are a great deal rosier than they were two years ago, he said.
“I know that the people in charge now are working very diligently to get the first restaurant open,” he said. “There was a time when we thought there was no hope and now we feel as though there’s great hope.”
Isaacs has less faith that the board will be able to do more than cover its ongoing expenses by issuing more debt.
“The problem here is the long drag,” Isaacs explained. “By the time the funds come into the company, they have been eaten up” by expenses other than restaurant construction, he added.
Lloyd J. Welch, of Cobb Island, holds $2,000 in Invest Maryland stock. He said he invested another $500 in the form of a promissory note after company officials said they needed more money to open the Glen Burnie restaurant. At this point, Welch said, he is skeptical whether he will see a return on his principal — or regain the principal itself — in the near future.
“They are paying me back some interest on” the $500 note, he said, but “I have been worried about it. As far as I’m concerned, they’ve got me for $2,000,” so he might as well try to help the company, he added.
Gordon, in an interview, maintained that Invest Maryland’s long-term vision remains intact: building more restaurants over the next few years and eventually adding insurance services.
Welch, who like Ventura invested originally on the advice of friends, wants to share Gordon’s vision despite his own skepticism. “A lot of [investors] are really upset about this thing,” he said, but “we still want to see it get off the ground.” -30-