Douglas County writes off USA Plastics tax bill

by Reg
(Nashua, NH)

Posted on the Northwest_Railfan Group today. Here are the details surrounding bankruptcies of two model railroad manufacturers in Roseburg, OR

by John Sowell, The News-Review

Douglas County commissioners on Wednesday wrote off back taxes owed by a defunct model railroad manufacturer once based in Roseburg.

County officials concluded they would never see the $57,202 owed by USA Plastics and the commissioners ordered County Assessor Ron Northcraft and Sandee Correll, the county's chief financial officer, to wipe the debt off the tax rolls.

“We've done all we could to collect. We even seized and sold the equipment, something that's rare for us to do,” County Attorney Paul Meyer said.

USA Plastics opened shop in 1993, manufacturing model rail cars through a plastic injection process. The trains were sold throughout the United States and in Canada, England, Australia and New Zealand.

The company accumulated more than $400,000 in debt and had its machinery and furniture, fixtures and other possessions seized in 1998 by the county. The items were seized to pay for unpaid taxes and penalties that at the time totaled $8,196.

The machinery was later sold to Frank Hubert, owner of Hubert's Model Railroad Manufacturing of Oregon, which also operated in Roseburg. He also encountered financial difficulties and in October filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court in the Southern District of Ohio, where he currently resides.

Equipment that originally belonged to USA Plastics was seized by Hubert's Douglas County landlord, Jay Roth. He's holding it to pay off what's owed to him.

In his bankruptcy petition, Hubert listed a debt of $1,803 owed to the Douglas County tax collector, $5,000 owed to Fred Becker, who had served as trustee when USA Plastics went out of business, and $9,861 to Horizon Service Center.

The county received a total of $8,000 in monthly payments from Hubert after he bought the USA Plastics equipment, but quit receiving any additional money after Hubert encountered financial problems.

When USA Plastics went bankrupt in fall 1998, the company owed $173,000 to the Douglas County Industrial Development Board, which provided start-up costs in 1993. The company also left a debt of $243,000 owed to the Coos Curry Douglas Business Development Corp. for similar expenses.

Additionally, it owed $60,000 to the state of Oregon for a loan issued in October 1997 and at least $50,000 to individual businesses.

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