Heritage & York LLc Deceptive financing promises
Let me preface by emphasizing this is my personal experience and each individual case may have a different outcome. I am merely writing to warn people that what you get promised is not necessarily what you will get.
In October of 2012, I received an email from Heritage & York Financial Group, LLC in Chicago noting that they understand my company is in need of financing to accommodate growth and they are able to assist. As we were going through a major contract the financing would have expedited our plans tremendously, I reluctantly replied and got an appointment with a “case assessor”, a Mr. Tom Wyscocki (Managing Director) at my facility on Tuesday 10/23/2012 at 4:00 pm.
This meeting was very positive. Tom knew exactly where we were and how our company like so many other companies are at the “tipping point” ready to accelerate into the fast track using funds from sources that Heritage and York continuously work with. He subsequently arranged a meeting with another assessor to “qualify” our firm.
This meeting took place on 10/25 with a Gentleman named Don Kaplan . This older gentleman was good, so convincing after a quick research I was ready to sign up. He went on to tell me about how his son was kidnapped, how he was involved in several multimillion dollar deals throughout the world and how many connections he had in the banking and cooperate world and he is ready to help us out. The catch: to accept I had to fork out
$1,850 upfront to cover the initial app and the travel expense.
$11,000 deposit and $11,000 upon completion of the “report”
For a grand total of $23,850
I was told the money would be used to create a report that will be used to attract the potential investors.
So I did some more research on this gentleman online and he was legit. He was a CEO of a big meat processing firm in FL that was sold to a much bigger company. So I decided to take the plunge.
On 10/26 A gentlemen name Shaunak Patel was assigned to my case and collected information for this “report” on almost daily basis. Everything seemed legit and the report was completed early about 4 weeks later. The report was obviously a templated report with a small part of it based on the information that was provided.
I was then put in touch with a gentleman named Sylvester Gbewonyo Jr in early Jan 2013. These guys all had the same title, “Managing Director” at Heritage and York. Sylvester Gbewonyo Jr. went back and forth for about a 3 months with the conclusion that I either had to borrow money at 18%-22% interest rate or there would not be a realistic chance to get financers or investors interested as the stock market is offering much better return than any company would at the moment.
Last night I was watching the movie American Hustle and saw a lot of parallels between my case and what was being promised in the movie. Even the initial “qualifying” stages were put together so proficiently.
All an all an expensive lesson but one that everyone else out these in my position should be very wary of.
1 Updates & Rebuttals
Client Services
Chicago,Illinois,
False accusations of “deceptive financing promises”
#2UPDATE Employee
Fri, June 20, 2014
We regret Mr. Asvadi’s false recollection of events and accusations of “deceptive financing promises”. Mr. Asvadi had never expressed any dissatisfaction to H&Y.
Heritage & York (H&Y) provides multiple services to small business owners in reference to turnaround strategies, sale of business, mergers and acquisitions strategies, financing and exit strategies. H&Y is paid for the services it provides.
H&Y maintains a positive, complaint free rating by the Better Business Bureau.
H&Y maintains on file, copies of Mr. Asvadi’s written contracts whereby H&Y was engaged to perform a detailed valuation and exit strategy analysis. Both of which, were completed to a high degree of professional standard. Mr. Asvadi wanted to recruit the lead staff member at H&Y that was responsible for providing a high level of scrutiny to Mr. Asvadi’s business strategies.
H&Y uses engagement agreements that are specifically tailored to a client’s situation, and it also uses general agreements when it considers it appropriate. Here is part of the language contained in Mr. Asvadi’s agreement:
“H&Y will prepare the Strategic Valuation and Assessment by utilizing the past four years of financial statements, historical accounting and operational information, financial forecasts and projections, industry and economic information, and other material information deemed influential by H&Y.”
“H&Y can make no representations, express or implied, that the Client’s business will be sold, or financing obtained, by virtue of the services to be provided under this Agreement.”
The Agreement goes on to explain H&Y Market Representation and fee structures for those services equal to either a single Lehman Scale for exclusive representation, or a double Lehman Scale for nonexclusive representation. Lehman Scale is an industry standard fee schedule.
Copies of the complete agreement signed by Mr. Asvadi that contradict his references and inferences of deception can be made available by contacting H&Y directly.
H&Y takes a further position of safeguarding its clients and H&Y by having a recorded Compliance Call at the time of engagement. The Compliance Call takes place with the full knowledge and agreement of the client. Mr. Asvadi, completed a Compliance Call.
These are just some of the questions from the Compliance Call, asked verbally to Mr. Asvadi at the time of engagement and prior to any payment being received for services by H&Y:
Have you been influenced in any way as to how to answer these questions I’m about to ask?
On the subject of a capital raise; have you been given any indication of interest rates with regard to this transaction?
Have you been provided with an opinion of time to complete a transaction?
Have you been told to expect a minimum number of either offers, term sheets or letters of intent?
Mr. Asvadi answered “no” to each question. Copies of the Compliance Call with Mr. Asvadi that contradict his references and inferences of deception can be made available by contacting H&Y directly.
If a small businesses is seeking a proportionately large amount of money compared to its revenue, profitability and other financial metrics, and any portion of that money is considered unsecured, an 18%-22% interest rate could be considered to be a good beginning interest rate if the business that is using the funds has the ability to generate returns that are greater than the cost (interest rate) of money. Meaning that the new money still has a beneficial effect on the business.
H&Y when engaged to seek financing for its clients works to find the best rates and terms available in the financial market. Ultimately, the rates and terms are going to be based on the degree of risk that the lender is exposed to. The greater the exposure of risk or default, the higher the cost of capital. The degree of risk is based on the client and the clients business.
We sincerely regret Mr. Asvadi’s false recollection of events and accusations of “deceptive financing promises”, and are able to offer substantial evidence to contradict any accusation of direct or indirect deception. Please contact Sarah Hyatt, Client Services at shyatt@heritageandyork.com.