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Wednesday, November 30, 2011

William Franke: Founder of Swift Boat Veterans for Truth Mired in Lawsuits

Posted By on Wed, Nov 30, 2011 at 10:58 AM

click to enlarge William Franke: The ship appears to be sinking for former Swift Boat Veterans leader.
  • William Franke: The ship appears to be sinking for former Swift Boat Veterans leader.
William Franke, the man who once owned the St. Louis Globe-Democrat and who in 2004 helped found Swift Boat Veterans for Truth to attack the war record of Democratic presidential candidate John Kerry, is today getting some bad press of his own.
Franke, who made millions in real-estate investments and other ventures through his St. Louis-based holding company Gannon International, is the subject of dozens of lawsuits filed this year that suggest he and his various business entities are in a financial tailspin.

In March, PNC Bank took Franke and several of his subsidiaries to federal court in St. Louis, claiming that the businessman and his companies were behind on repaying nearly $20 million in promissory notes secured through St. Louis apartment complexes owned by Gannon and Franke. One of those properties, the 272-unit Springwood Apartments in suburban Bel-Ridge, drew headlines this spring when the city quit issuing occupancy permits after Gannon let the property decline to a point it was considered unsafe for habitation. 

The PNC case is still wending its way through court, but already a judge has ordered the sale of at least two of those apartment complexes -- including the 336-acre Suson Pines in south St. Louis County -- in order to repay the notes. Meanwhile, in October, a judge in St. Louis County Circuit Court issued a summary judgment ordering Franke to pay Centrue Bank $3.4 million for loans taken out against several other St. Louis properties he owns under different limited-liability companies.

Also last month Franke's former chief operating officer at Gannon International, Robert Greene, filed more than a dozen lawsuits against his former boss in St. Louis County Circuit Court. Greene, who worked for Franke for 26 years before resigning in March 2010 over disagreements with Franke, contends in court filings that he still has an equity stake in 19 different Gannon subsidiaries and alleges that Franke is improperly siphoning money from those companies for his "own personal use" and to pay the expenses of other businesses under his control.

On October 26, Franke fired back, suing Greene in federal court on claims that he borrowed $750,000 from his former boss in 2007 and has yet to pay off more than $500,000 of the original note. 

Former Franke employee Robert Greene accuses his ex-boss of misusing funds.
  • Former Franke employee Robert Greene accuses his ex-boss of misusing funds.
​Greene's first legal skirmish with his ex-boss date back to earlier this year when he and another former Gannon executive, Walter Blocker, sued Franke in St. Louis County Court regarding a Vietnam business deal gone bad. Greene and Blocker, who ran Gannon's Southeast Asia operations, say Franke promised them an ownership percentage in Gannon's Vietnam holdings. According to the suit filed in May, Gannon and Franke are now seeking Vietnamese governmental approval to sell a milk factory in the Asian county to Nestle for $10 million without paying Greene and Blocker any proceeds from the sale. The men believe they're owed $1.5 million and $3 million, respectively.

"Gannon is in the midst of a collapse," says Greene in a statement emailed to Daily RFT. Greene notes that the Metropolitan Sewer District is even suing Gannon and Franke for failure to pay utility bill and adds that Franke's Virginia-based IT firm, Gannon Technologies Group, is also suffering. 

"At this point, it is understood the Virginia operation is down to but a few employees," says Greene. 

Attempts to interview Franke to confirm any allegations against him were unsuccessful. Last week a Gannon spokesman emailed Daily RFT a blanket statement in response to several questions posed to Franke and his company. That statement seemed to pin most all Franke's problems on Greene and Blocker, and read -- in its entirety:  

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