When the Colorado Accountable Government Alliance sent out a mailer lobbing all sorts of accusations against Colorado House District Three candidate Brian Watson’s business dealings, House Minority Leader Mark Ferrandino batted clean up by offering to Fox31 that “Kagan saved his parents’ textile company and managed it for 10 years” and added, “His parents’ company in England was failing, he went back and rescued it.”
Well, not quite.
We took a closer look at Kagan’s business, Kagan Textiles, in the United Kingdom. It would appear from the financial statements that the Kagan family (including his mother and brother, who also served as directors) dissolved – not saved – the family’s company. In fact, during his time on the board of directors, Kagan liquidated nearly £20 million in company assets.
Kagan was appointed a director of Kagan Textiles from September 1, 1996. For the period ended January 31, 1996, gross revenue totaled approximately £493,000. Of this amount, £417,000 was derived from rental revenue and interest income. The cash the company had on January 31, 1996 was £605,000. At the end of 2008, the company’s revenues were £684,320 and they had £13,580,191 cash on hand.
Selling off nearly £20 million in company assets doesn’t exactly equate to “rescuing” a company. Those are the actions of someone who is dissolving the company, which Kagan did formally on July 19, 2011. Further, to give you a concept of scale, in 2007, Kagan Textiles collected approximately £80,000 in gross rents and earned approximately £274,000 in interest, while the company recorded a £6,120,515 profit on the sale of fixed assets (e.g., real estate).
It was also interesting to note that around 2001, the principle purpose of the textile company changed significantly. (See snippets from the financial statements below)