HARRISVILLE -- A Top of Utah company that has been making bricks for nearly 30 years is now out of business, and the company's president has filed a lawsuit against Zions Bank, claiming its actions led to the closure.
The suit, which was filed June 18 in 3rd District Court in Salt Lake City, alleges that Zions Bank stonewalled Interpace Industries Inc. on a line of credit that was being negotiated between the two parties and prematurely terminated another line -- actions that prevented the brick maker from meeting certain manufacturing deadlines and paying its employees.
Heidi Prokop, communications manager with Zions Bank, said it's the bank's policy not to comment on pending litigation.
A privately held, family-run company, Interpace was founded in 1984 and is located at 736 W. Harrisville Road. Although ownership has changed several times, brick has been made at the Harrisville Interpace site since 1888.
An article about the opening of the plant from an 1888 issue of the Ogden Standard said it was "the largest brick factory west of St. Louis."
Interpace President Jon Rhine said that at its peak, the plant employed 60 people and produced about 24 million bricks each year, which were shipped all over North America.
The suit says the global recession that began in 2009 caused Interpace's business to suffer greatly, but the company survived hard times and began to rebound in 2012.
Throughout the crisis, Interpace had four commercial loans with Zions and other banks and a revolving line of credit for $400,000 with Zions that was used for operating expenses.
In December 2011, Interpace told the bank it needed to repackage its loans with the various lenders, including Zions, into one credit facility. The suit alleges that Zions agreed to work with Interpace and began negotiating the new credit facility.
In spring 2012, based on assurances from Zions that a deal was on the horizon, Interpace fired up its kiln after a winter of inactivity, which is typical in the brick industry, and began work on two major contracts to provide brick for an LDS church house and for Casper College in Wyoming.
Nearly three months after Zions sent Interpace a formal proposal, the bank had still not finished the deal, the suit claims.
Rhine says at that point, it was clear the new credit facility would not be approved by Zions and on June 6, 2012, he told Zions he was left with no choice but to shut down the facility and that he planned to do so by July 15, 2012.
Rhine told Zions he needed some time to shut down the facility in a proper manner, and he would need to continue to use the original $400,000 revolving line of credit to pay employees to help shut down the facility.
"We had a kiln that was in full production," Rhine said. "And you need time to shut it down because it's basically an enormous bomb. It's a really technical process, and it could be disastrous if it isn't done right."
But on June 18, Rhine received an email from Zions, telling him they were shutting down the line of credit because of Rhine's plan to close the business. Rhine says he was only given two days' notice, and then the credit line was shut down.
Rhine told his employees that he wasn't sure how they would get paid, but he needed their help to shut down the kiln. He said about half of his employees walked out, and the other half stayed to help retire the kiln.
Rhine said he eventually paid those employees through other means and safely shut down the kiln, but Interpace was unable to process the orders for the church and the college.
The lawsuit also claims Zions was under pressure to repay outstanding Troubled Asset Relief Program loans during the negotiations with Interpace, which wrongfully discouraged commercial lending. The suit states that Zions repaid a $700 million balance of TARP funds to the U.S. Treasury three months after it pulled Interpace's line of credit.
The filings claim that Zions breached its "duty of good faith and fair dealing" with Interpace when it terminated the line of credit and only gave two days' notice to do so.
Interpace is asking for $400,000 for breach of contract and other damages to be determined at trial.
Now, nearly a year after the shut-down process began, Interpace is in the final stages of closing down its Harrisville site for good.
The company's 56,000-square-foot plant that houses the no-longer-functioning kiln has gathered dust and become home for several area pigeons. Unused brick still sits packaged in the yard behind the company's main office.
Only two employees remain at Interpace, but they'll be gone soon, too.
"I really don't know exactly what I'm going to do," said Ron Christensen, who has been working at the plant for 38 years. "I guess I'll either try to reinvent myself or get another job in the masonry industry."
Rhine has since sold the site and the land, but he says it won't continue to function as a brick-manufacturing facility.
"It's really a sad deal," he said. "I don't know if a lot of people knew about this place, but it was one of a kind. Brick has been made right here, in the Ogden area, for nearly 125 years, and now it's all gone."