By Melissa Dunson
mdunson@joplinglobe.com
LAMAR, Mo. — O’Sullivan Industries has terminated the deal with a California company to buy its empty 1.2-million-square-foot plant in Lamar, raising questions about the ability of another company to bring 475 jobs to town.
According to a lawsuit filed in U.S. District Court of the Western District of Missouri, O’Sullivan Industries has terminated the purchase agreement to sell its building in Lamar to Structured Equity Advisors, a Newport Beach, Calif., investment company for $4 million.
O’Sullivan and SEA signed the purchase agreement last August. SEA was then supposed to lease part of the building to Polymer-Wood Technologies, a Dallas, Texas-based door manufacturer. Polymer-Wood was supposed to create 475 new jobs in Lamar, saying that it would pay an average annual salary of $41,000.
Despite the severed deal on the building, Evan Daniels, president and chief executive officer of Polymer-Wood, insisted Friday that he remains committed to establishing a door-manufacturing operation in Lamar, but he would not say how or when.
“We are planning to come to Lamar, we have always wanted to come to Lamar,” Daniels said by phone Friday. “We love this community.”
He said he was confident that the end of the plant deal would not keep his company from making a move to Lamar, that another way would be found.
He would not comment Friday on the O’Sullivan-SEA lawsuit.
Robert Duncan, SEA manager, refused to provide contact information to the Globe last year when the deal was originally signed, so he could not be reached for comment Friday, and several attempts to reach O’Sullivan officials in Lamar on Friday were unsuccessful.
O’Sullivan is alleging the deal fell apart because SEA dragged its feet in closing the real-estate purchase. And now O’Sullivan wants SEA to turn over the $1.5 million in “earnest” money the purchase agreement says belongs to O’Sullivan if the deal fell through, and SEA was to blame. The lawsuit asks the court to make SEA turn over the earnest money, along with interest and attorney fees incurred in the lawsuit.
The lawsuit has caused confusion at Lamar City Hall. City Administrator Lynn Calton said he knew about the lawsuit, but had not heard anything about the deal not going forward.
The lawsuit, Calton said, lists Wachovia Bank as holding the deed of the O’Sullivan plant building at 1900 Gulf St., but O’Sullivan is referred to as “the seller” in the purchase agreement.
“We’ve not gotten any word from anybody,” Calton said. “To my knowledge, it’s still on. We’re waiting on SEA and Wachovia to close the deal.”
SEA had from Aug. 9 to Oct. 8 to inspect the building and “determine those factors, if any, that will increase the development costs of the property.” After that, the earnest money would go to O’Sullivan. The closing date was originally scheduled for Oct. 18. SEA allegedly asked for more time, the inspection period was extended and a new closing date of Dec. 19 set. SEA asked for another extension, and a new date of Jan. 31 set.
During that time, SEA and O’Sullivan made several amendments to their purchase agreement. The purchase price that SEA would pay went from $4 million to $4.825 million. SEA also had to make a new lease agreement with the Burlington railroad company because a small part of the land is owned by the railroad. O’Sullivan’s annual lease with Burlington was $800 a year at the time the company closed.
O’Sullivan and SEA previously agreed that SEA could “hold back” $100,000 from O’Sullivan until the company turned over the building clean and in good shape. That amount was later reduced to $25,000.
Because of several judgment liens filed against O’Sullivan after SEA signed the purchase agreement, the building had to go through a nonjudicial foreclosure sale Jan. 30, 2008. SEA agreed to bid the purchase agreement amount on the property Jan. 30 and close on the property the next day. But the day before the foreclosure sale, SEA allegedly said the property needed repairs estimated at more than $1 million, and would not close unless O’Sullivan made the last- minute repairs. SEA alleged that O’Sullivan had breached its contract by not maintaining the property. SEA had previously agreed the property was “satisfactory” as of Dec. 21 in the second amendment to the purchase agreement.
O’Sullivan is alleging that calling for repairs the day before the closing wasn’t the first time SEA tried to get out of the deal. The filing alleges SEA turned in the lease with Burlington to O’Sullivan too late for the Jan. 31 closing date, and then tried to use that as an excuse to terminate the purchase agreement. The lawsuit also alleges SEA knowingly bid incorrectly on the property, forcing the sale to be postponed to Feb. 26. But before that final closing date, SEA allegedly tried to terminate the purchase agreement and demanded the return of its deposit Feb. 15.
In response, O’Sullivan terminated the agreement March 11.
Former employer
O’Sullivan Industries is a wood-furniture manufacturer. It was Barton County’s largest employer when the company closed its Lamar plant. The July closing resulted in the loss of more than 700 jobs.
