Georgetown man says his business was taken from him

BY CHRIS MORRIS
NEWS AND TRIBUNE

Kevin Carroll was once one of the top dealers for Clayton Home’s Hodgenville plant. He was selling $5 million in homes a year from his Georgetown location – Carroll’s Mobile Homes, Inc.
Carroll said he was selling prefabricated homes in a 100-mile radius, and was going strong even during a slow economy. In fact, he said Clayton, which is based in Knoxville, Tenn., built the plant in Hodgenville to help supply his demand and to build homes with “a northern” look.
But in the fall of 2008, everything went south, and Carroll said it had nothing to do with the economy or his business skills. He said it was all about greed. And he said he won’t stop fighting what he calls a “total injustice” until he receives retribution from Clayton Homes.
“They can make it right,” Carroll said of Clayton Homes. “They can make this all go away. I am not going to stop until I get my business back.”
Carroll said the problems began with a simple phone call in 2008 to Kevin Clayton, president of Clayton Homes. Carroll said he told Clayton he was looking to downsize his business, and buy out his partners, which included his brother and ex-wife. He said at the time he had $2 million in Hodgenville inventory on his lot.
He said he called Kevin Clayton for advice. He noted that he told Clayton he was trying to buy out his partners.
“I told him that the Hodgenville plant was the backbone of our business and by micromanaging our overhead, it would keep us a very successful business,” Carroll said.
He said he mailed certain financial documents to Clayton, which were requested, and he received a call Oct. 1, 2008, to inform him his business loan was approved. He said he only asked for advice, but accepted the loan in good faith to help him pay off his partners and put money back into his business. He said his friend’s farm was put up for collateral, but he said he was not concerned since his business was doing well. The $150,000 he borrowed was used to pay off his brother, who was his business partner.
Two weeks later, he was informed the Hodgenville plant was closing. And since he was sitting on $2 million in inventory, with no hope for replacement parts or future homes once the plant closed, he said he was “dead in the water.”
He insists the entire transaction was an “inside job” to gain control of his business. He said he eventually lost his company since he had no way of selling homes which were not finished and had no hope of getting parts. He had no way to pay back his loan or sell the inventory, he said.
“There were only two of us who were in the $5 million club in the country. We were making money,” Carroll said. “I was stuck with all that inventory and was paying high interest on those homes.”
Kevin Clayton has another version of the events that occurred in 2008. He said Carroll called on a few occasions to borrow money for his business.
“We had a terrific relationship with Carroll Homes,” Clayton said. “They did great volume there in that community.”
Clayton contends he had no idea the Hodgenville plant was going to close after his company lent money to Carroll. He also said Carroll could have continued to buy products from one of the other eight Clayton manufacturing locations.
“Ultimately, our manufacturing group made the decision to close the Hodgenville facility,” he said. “Shortly after that, he asked if we would be interested in buying his business. We eventually did that and it paid off his debt ... his business loan.
“It’s a very serious thing [to close a manufacturing facility]. I didn’t know we were going to close down that particular facility. Everyone knows how bad the economy was.”
Carroll said he had no choice at the time to give up his business to Clayton because he could not let them take his partner’s farm.
Carroll said he has informed the Federal Trade Commission and the Indiana Attorney General’s office of the events that occurred in September and October of 2008 and has hired an attorney. He said he has been fighting every day for the past three years to get his business back. He said Clayton had to know they were loaning money in bad faith.
He said he wants to be compensated for his losses. He said Carroll Homes had been in Floyd County for decades and he wants to return to business.
“Clayton knew exactly what they were doing,” he said. “Why would you loan someone money if you were going to shut a plant down in two weeks?”
Clayton disagrees.
“We were caught off guard by this. We had a tremendous relationship with him,” he said. “He asked to borrow money on a couple of occasions and we did that. He sold us the business or he was going to default on his loans.”