Behind Tom Wolf’s Business Success, A More Complicated Picture

From the Philadelphia Inquirer:

Investment and loan documents reviewed by The Inquirer indicate that Wolf’s business and financial story is more complicated than a 30-second political ad might permit.

Wolf’s family business — the Wolf Organization, a kitchen-cabinet design and distribution firm — has lost nearly half its value since the recession and the debt it took on in a leveraged buyout designed to pay a total of $60 million to Wolf and two of his cousins.

In reports to investors, the buyout fund that financed that deal, Boston-based Weston Presidio Fund V, says its investment in the Wolf Organization is worth just $22 million – a big drop from the $41 million Weston has invested in the company since 2006.

Reached at his Boston office, Weston Presidio cofounder and partner Michael F. Cronin, who sits on the Wolf Organization’s board, declined to comment on Wolf and referred any questions to Weston Presidio chief operating officer Therese Mrozek, in Weston Presidio’s San Francisco office. Efforts to reach Mrozek were unsuccessful.

The fund’s partial buyout of Wolf’s firm benefited him and his two cousins, but it has been a loss so far for the fund’s investors, the largest of which is Pennsylvania’s underfunded State Employees Retirement System (SERS). SERS voted in December 2004 to invest $50 million in the fund, said SERS spokeswoman Pamela Hile. SERS had invested in previous Weston Presidio funds since 1998.

Wolf led a financial rescue to stabilize the company – “I went back into the burning building,” as he puts it – but the company is not yet back to its former value and has not begun to repay him and other investors, he acknowledges.

That hasn’t necessarily affected Wolf’s business reputation.

“His policies aside, I think he’s viewed as a very solid guy, a well-respected guy who has been successful in building his business,” said Kenneth Graham, senior managing principal at Inverness Graham, a Newtown Square firm that invests in private companies, and a member of a family that, like the Wolfs, are longtime York County business owners.

The transactions raise an obvious question for Wolf’s campaign: If Wolf really committed all his money to saving the family business, and if that business remains depressed, where did he get $10 million to run for governor?

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