The president of Maryland Reclamation Associates Inc. has been ordered by a Harford Circuit Court judge to repay a $50,000 loan issued tohim three years ago by his former employer.

Richard D. Schafer ofChurchville was given the loan by Eastern Mechanical Contractors Inc. of Timonium on Aug. 23, 1988 to help pay for building his new house, court records say.

The company sought repayment for the interest-free loan in June 1989, after it fired Schafer, but Schafer did not make any payments, the company claimed.

Eastern Mechanical sought payment for the loanafter Schafer sued the company in June 1989 for $3 million in damages as a result of what he contended was a soured business deal.

Schafer contended that he and the company's president, Harry High, had agreed to form a partnership to seek utility construction work, court records show.

In the partnership, High agreed to establish a profit-sharing arrangement between the company and Schafer, the plaintiff said court documents.

But Circuit Judge Cypert O. Whitfill denied Schafer's request for the $3 million in damages. Instead, Whitfill ordered Schafer to repay the $50,000 loan to Eastern Mechanical.

Whitfill said in his 22-page ruling of June 12 that Schafer did not showthat Eastern Mechanical had agreed to form the partnership and the profit-sharing arrangement.

"We do not doubt that there were some conversations between Mr. Schafer and Mr. High about the possibility of performing a new business venture," Whitfill said. "However, that discussion is not sufficient to prove that a partnership existed."

Schafer went to work for Eastern Mechanical in November 1985 as a subcontractor and later as an employee hired to fulfill the company's utility construction contracts, court documents say.

Court records show Schafer was to be paid a $30,000 annual salary and $20,000 annually for the use of his equipment at Eastern Mechanical jobs until a profit-sharing arrangement was struck.

High said in court records that he presented Schafer with a profit-sharing arrangement in 1987. Schafer rejected the arrangement, but continued working for Eastern Mechanical, court records say.

Schafer was fired in spring 1989 afterEastern Mechanical's president learned he used the company's materials, workers and equipment for constructing his house, court records show.

Schafer's company, Maryland Reclamation, seeks state permits to develop a rubble and asbestos dump near Havre de Grace.

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