Stinger Welding, a beacon of economic development in Libby just two years ago, now faces an uncertain future in the wake of a lawsuit over assets and the recent death of its chief executive officer.

Employees of the bridge fabrication company have been told their jobs in Libby likely will be gone by the end of the month, The Western News reported Friday, and a financial group temporarily running the company is sorting out Stinger’s remaining assets.

Lincoln County Commissioner Tony Berget told his fellow commissioners this week that he’s been advised the Libby plant will close in two to three weeks.

“We’re told a Montana contract awarded to Stinger has already been moved to the Arizona facility,” Berget told the other commissioners. “We don’t know everything, but apparently, even the facility in Arizona [the company’s main plant in Coolidge, Ariz.] is in jeopardy.”

Stinger came to Libby in 2009, promising 200-plus good-paying jobs, and was welcomed by a community that has struggled economically for decades.

In July 2011 Stinger Welding got $17 million through a federal financing program to complete its 105,000-square-foot fabrication plant. Sen. Max Baucus, D-Mont., played a key role in securing the money for Stinger and said at the time he was thrilled to “come up with this innovative way to create good-paying jobs here in Montana.”

At that point the stars seemed to align for the company.

Today it’s a very different story for Stinger.

Company CEO Carl Douglas was killed in a plane crash near Libby in December 2012 as he was flying there from Stinger’s home base in Coolidge. Ownership of the company was handed to Douglas’ widow, and in mid-January Stinger voluntarily was put into receivership. MCA Financial Group of Phoenix was appointed to manage the company and its assets.

In October 2012 the Lincoln County Port Authority, the entity that owns the property on which Stinger operates and helped bring the welding company to Libby, sued Stinger to protect the Port Authority’s assets.

The Port Authority and Stinger signed a development agreement in 2009 that allowed Stinger to build its plant on the Port Authority-owned Stimson mill site. Once it was completed, the Port Authority intended to buy the facility and lease it back to Stinger.

The lawsuit alleges Stinger failed to comply with the development agreement in that the company was unable to pay for the construction of the plant. Lincoln County provided a $3.4 million grant for the start-up. Since Stinger hasn’t repaid the money, the county intended to deduct the grant amount when it came time to purchase the completed facility.

Now county officials are worried those assets, still valued at more than $3 million, could be relocated if Stinger scales back or closes its Libby operation. It’s said to be imminent that the company will close the Libby operation once remaining work orders on the docket are completed, though company officials won’t confirm that.

A receptionist answering the phone at Stinger’s Libby plant on Thursday said Steve Patrick, vice president of Stinger’s Northwest operations, was at work, but that neither Patrick nor anyone else at Stinger is speaking to any member of the news media.

Patrick wrote a guest editorial recently for the Kootenai Valley Record, criticizing the Port Authority and arguing that Lincoln County has failed to give the company the support it needed.

Stinger has filed a counter-lawsuit against the Port Authority, denying most of the allegations and accusing the Port Authority of fraud and slander.

Patrick’s opinion piece demanded that the county drop the lawsuit.

“Is Stinger Welding going to survive and continue to pump a multimillion-dollar payroll into the community?” Patrick wrote. “These answers largely reside in whether Lincoln County drops its lawsuit against Carl Douglas and Stinger Welding. Carl is dead and Stinger is operating in receivership.

“Spending scarce dollars defending against an admittedly bizarre lawsuit is the last thing Stinger needs in its quest to continue operations and provide jobs in Lincoln County,” Patrick continued.

Patrick spoke briefly with a reporter from The Western News on Monday, indicating the company doesn’t intend to remove any assets from the Port Authority property.

Patrick’s job as vice president ended Friday, and John Boyd, the senior managing partner of MCA Financial Group, said Patrick will be used as a consultant if needed.

Some Stinger employees reportedly have been offered jobs at the company’s Arizona plant.

Paul Rumelhart, director of the Kootenai River Development Council that works in tandem with the Port Authority, had a key role in bringing Stinger to Libby. He isn’t speaking to the press in the wake of the litigation.

Helena attorney Allan Payne, legal counsel for the Port Authority, said the lawsuit is moving forward against Stinger, adding the lawsuit “is not the reason for Stinger’s problems.”

Stinger’s financial troubles apparently had been brewing for some time before the lawsuit was filed. Last August then-Lincoln County Commissioner Marianne Roose was concerned about reports that Stinger was delinquent on lease and electricity payments to the Port Authority.

“I just think they need to be honest with the community,” Roose told The Western News. “I’m very concerned about our local businesses waiting for payments and checks bouncing.”

Reports also surfaced about Stinger employees having trouble cashing payroll checks.

The Western News filed a Freedom of Information Act request to get records of Stinger’s delinquent bills and found the company in August 2011 owed the Port Authority about $44,300 for various leased items such as modular office space and equipment. Several businesses in Libby told the newspaper they also were owed money by Stinger. One motel indicated the company owed about $20,000 for housing welders coming in from out of town.

Stinger also has been named in federal liens for delinquent taxes.

In July 2011 when Stinger got the $17 million infusion from the federal financing program written by Baucus, the Libby plant employed 43 workers but was ramping up its work force.

In January this year the company had 69 employees.

The Western News in Libby contributed to this report.