Not even a $2.3 million judgment against him and his company can dissuade a Columbia businessman from believing that he can succeed.
Bill McNeely, the marketer for UMI Inc., describes the company’s contentious quest to fund a new vending machine technology as a “mission.” He said Friday that he “got closer to the Lord because of the company.”
McNeely said he doesn’t mind the default judgment handed down by Circuit Judge Gene Hamilton last week, which requires McNeely to pay $2.3 million to reimburse 43 investors and pay government fines for bad business practices. The lawsuit was filed by Missouri Attorney General Jay Nixon in February.
By accepting a default judgment, he said, he is taking responsibility for his actions, unlike his now-estranged wife, Gail Wilkerson, and business partner, Craig Swoboda, who were also named in the suit. Wilkerson and Swoboda have submitted responses to the allegations that the three used millions of dollars of investors’ money for personal purchases, soliciting investments to pay off other investors lawsuits and never bringing any product to market after nearly 15 years of business.
“I don’t mind a personal judgment for the money because we are going to move this company forward,” McNeely said.
In April, Hamilton placed a preliminary injunction on the company that states UMI may not solicit more investments, but McNeely may continue to seek a buyer for the unfinished product.
McNeely said the technology is a data board known as a black box that, when wired into a vending machine, keeps track of what people buy from the machine and communicates the total to a remote monitoring center. The black box, he said, would make life easier for people who stock vending machines, but it needs one more test before it’s ready for production.
“It takes the guesswork out of vending,” he said.
McNeely said Friday that he has offers from vending companies to buy the device once it is ready, but wouldn’t name the potential buyers. He said a sale of his “viable” product is the only way for investors to make their money back.
“We do have more than one interested corporation that’s ready to take this company on,” he said.
McNeely said that he alone is the key to getting the investors their money back, not investigators or lawyers.
“They’re not going to get their money back through the attorney general’s office,” McNeely said. “They’re only going to get their money back if I market the technology.”
Since 1999, UMI has worked with Mike Sheers, an engineer who operates Northern Datacom in Akron, Ohio, to develop the device. But McNeely said Sheers has been uncooperative since court proceedings began in February.
Sheers did not immediately return a call from the Missourian on Saturday. But according to the lawsuit, Sheers stated that he is no longer doing business with UMI or McNeely. He added that without his help, “it is very unlikely” that the McNeely will be able to create a product to sell.
McNeely said he suspects that Sheers is trying to sell the idea to someone else.
“He might have thought we would never revive,” McNeely said.
McNeely said he believes that UMI will survive because some of the nearly 100 investors, who live throughout the Midwest, still believe in the dream.
“Normally under these circumstances and under this much litigation most startup companies would die,” he said. “But this company is being reorganized as we speak.”
James Wendt, who works at a dental laboratory in Overland Park, Kan., said he founded the company with McNeely 16 years ago.
While he admits that the company was “probably” mismanaged, he said the problems are in the past, and that UMI is ready to move forward with stockholder meetings.
“My feeling is, we probably should’ve had a few more meetings,” Wendt said. “Communication was probably a factor here, and that’s what we plan on doing here now, is have a meeting in the next 45 days with all the stockholders.”
McNeely said he plans to e-mail investors and officially schedule a meeting.
Max Keeler, an investor who lost all of his $250,000 retirement IRA in the scheme, said a shareholder meeting would not “disavow the judgment that was passed down.”
“Obviously, I’m skeptical,” he said. “I’m still in financial trouble.”
Both Wendt and McNeely said investors should have assumed that there was some risk when they invested in the company.
“When people invested in this technology, they knew it was a high-risk investment,” McNeely said. “The greater the risk, the greater the gain.”
When “you put money into a business you assume a risk,” Wendt said. “And I don’t see how they think they can just get their money back out.”
The lawsuit alleges, however, that McNeely promised investors — often on paper — that they could have their money back at any time.
Keeler said he found that was not true when he started asking for his money back about once a year starting in 1997 and was turned down every time.
“This is not a risk I bargained for,” Keeler said.
Keeler said Saturday he is not sure whether he would attend a meeting.
“I’ve heard so many promises from (McNeely),” Keeler said.
Wendt said he believes that McNeely will come through this time.
“Bill’s working hard to raise that money,” Wendt said. “They want their money back, we’re going to get it back to them.”