CONWAY, SC (WBTW) – A tech company that opened in Myrtle Beach just weeks ago, suddenly shut down, leaving 50 employees without a job Friday morning.
Not only were the 50 employees left without an income just days before Christmas, but the government groups who approved tax incentives for the tech company, seemingly overlooked major red flags that indicated the company was about to fold.
Greenwood Hall, a California based company, promised to bring 300 new jobs and invest $1.5 million dollars into Horry County. The problem is, Greenwood Hall didn’t have $1.5 million, according to information reported to the Securities & Exchange Commission.
KBTX, a CBS News affiliate in Texas, says Greenwood Hall is an education technology company that partners with colleges and universities to improve student engagement and outcomes.
An entry made by the company to the SEC on May 31 questions the company’s financial ability to continue to operate for even one more year.
“Presently, the Company does not have sufficient cash resources to meet its plans in the twelve months following May 31, 2017. These factors raise substantial doubt about the Company’s ability to continue…” the document reads.
Roughly four and a half months later, Horry County leaders met in executive session and afterward, announced a tech company – later identified as Greenwood Hall – would receive tax incentives for its promise to invest $1.4 million in the county and bring more than 300 jobs to the area.
Horry County normally requires a company to invest at least $2.5 million to receive tax credits, but county leaders, in partnership with the Myrtle Beach Regional Economic Development Corporation, decided they would make an exception for Greenwood Hall. Documentation showed the company was floundering financially, and by admittance from company executives would likely not last for another year, but the Myrtle Beach Regional Economic Development group and Horry County Council agreed to work with Greenwood Hall anyway.
The SEC documentation from Greenwood Hall execs goes on to say, “If the Company is not successful in becoming profitable, it may have to further delay or reduce expenses, or curtail operations.”
Friday’s mass layoff, from what was supposed to be a temporary call center location on the campus of Horry Georgetown Technical College, is not the first time the company closed an entire facility or released numerous employees with reportedly no warning to workers.
KBTX documents that in July “dozens of temporary employees” were out of work after Greenwood Hall failed to pay the staffing agency that provided the workers for the Bryan, TX facility.
Within two weeks of those employees being let go over the summer, Greenwood Hall filed forms with the SEC saying CEO John Hall would resign from the top position of the company. That leadership change is one reason Josh Kay, president and CEO of the Myrtle Beach Regional Economic Development Corporation, said the county agreed to work with Greenwood Hall.
Kay agreed to speak with News13 Friday morning regarding Greenwood Hall’s sudden collapse, and offered the following statement.
“We are extremely disappointed and shocked about the news of Greenwood Hall closing its Myrtle Beach operations,” claims Kay in a written statement. “Our main concern is for the 50+ individuals who find themselves unemployed during the Christmas season. We are working closely with SC works and other organizations and businesses to assist these individuals in finding gainful employment as soon as possible.”
Kay says leaders were aware of Greenwood Hall’s unsteady financial history, but believed the company was making strides to grow. Kay adds that the tax incentives the company was to receive were performance based. Given the short lifespan of the company’s presence in Myrtle Beach, Greenwood Hall did not receive incentives from the economic group.
“We reviewed the company’s financial statements from the previous two years as well as projections for this year. They had made tremendous improvements in reducing expenditures while also adding new contracts. Couple that with the change in leadership, we felt comfortable working with Greenwood Hall. While the company signed a performance agreement that outlined their potential eligibility for a performance-based reimbursable grant, they were never eligible and therefore did not receive incentives from the MBREDC.”
In a late night email sent Nov. 30, Greenwood Hall told its employees at the Bryan, TX facility they no longer had a job, reports KBTX. The landlord of the building housing the Texas plant told KBTX that Greenwood Hall was more than $100,000 behind on paying its bills.
Now, just two weeks later, more than 50 people in Horry County are unemployed because of the same company. Greenwood Hall CEO spoke to News13 off camera and said the company’s lack of cash is what ultimately led to closing the doors.
“I’ve had this job for four months and we were trying to do a turn around,” says CEO Bill Bradfield. “But we lost some customers [Thursday] for all the wrong reasons. We didn’t have enough revenue to cover the expense.”
Bradfield alluded to the idea that Greenwood Hall’s closure was imminent.
“If we would have stayed in Texas, this same thing would have happened, but a lot quicker. It was inevitable. We didn’t do a quality job communicating with our clients.”
Bradfield says he doesn’t know if the employees will be paid for recent work at the Myrtle Beach office, and he spoke with some of the workers Friday morning.
“I was handing out cash this morning because some of the workers didn’t even have gas money to get home,” describes Bradfield. “This is heartbreaking.”
Horry County has not responded to News13’s request inquiring who is responsible for vetting potential companies before they are brought into the county with government support. Greenwood Hall’s financial problems have been documented for months, long before Horry County and the MBREDC decided to back the company. Greenwood Hall’s financial records and reports of an unlikely future are available online, for free, through a search on the SEC website.
