O'Sullivan sale canceled; lawsuit filed against buyer

The promise to resurrect an abandoned manufacturing plant and to bring almost 500 jobs back to a Southwest Missouri city that lost nearly 800 jobs last year has been canceled, ending in a lawsuit brought against to prospective buyer.

O'Sullivan Industries, acting as a corporation in Wilmington, Del., formerly of Lamar, Mo. has filed suit against Structured Equity Advisors with the Western Missouri U.S. Court for the amount of $1.5 million plus additional interest and attorney fees.

On March 11, O'Sullivan Industries canceled the sale due to what it claims was numerous attempts from SEA to postpone and delay the closing date. In a 54-paragraph complaint filed March 13, then amended on March 14, O'Sullivan claims SEA broke contract by canceling two closing dates and did not appear at the final sale of the 1.1 million-square-foot building, without cause or justifiable explanation. This in turn nulls SEA's right to reclaim $1.5 million in earnest money used as a deposit for the sale, according to the O'Sullivan's claim.

According to the suit, SEA amended their purchase agreement twice, pushing the closing date from Oct. 18 to Dec. 19 then to Jan. 31, at which time they were to appear and place a bid during the foreclosure sale of the O'Sullivan property. The extended period of time for closing resulted in the sale price of the building going from $4 million to $4,825,000.

An inspection period was set during the original draft of the sale ending SEA's rights to claim damages on the building Oct. 8; however, on Jan. 27, four days prior to the closing date, SEA reportedly claimed the building suffered further damages and would require more than $1 million in repairs.

An underlined portion of the sale contract reads, "in the event that the purchaser fails to bid in such sale as required herein, Seller will be entitled to retain, as liquidated damages, the Earnest Money."

Lamar City administrator Lynn Calton said he was unsure of the standings between O'Sullivan and SEA but was aware of the suit being filed. "As far as we know SEA has not abandoned the sale and is awaiting the go ahead and obtaining the building," he said.

Another point of argument in the suit was a small section of property owned by Burlington National Railroad Company previously leased for $800 a year by O'Sullivan. According to the complaint, SEA failed to complete the application supplied by O'Sullivan transferring this lease into their name, then stated that they never received the application.

Had the transaction taken place, Wachovia Bank, the holder of a property lien on the building and surrounding property would have collected the entire purchase amount since O'Sullivan Industries owed them about $8.4 million.

A business plan announced last October led residents of Lamar to believe SEA would be purchasing the closed factory and leasing half of the facility to Polymer-Wood, a Dallas Texas based composite wood door manufacturer. Polymer-Wood was expected to bring 475 jobs back to an area in desperate need of a major employer, according to statements by city officials.

In an interview with the Joplin Globe, Daniels stated that he intended to continue his pursuit of a Lamar manufacturing plant but was unsure of when or how it would come to be. "We are planning to come to Lamar, we have always wanted to come to Lamar," Daniels told the Globe. "We love this town."

Phone calls to SEA's legal council as well as Evan Daniels, president of Polymer-Wood and the lead counsel for O'Sullivan Industries, were not immediately returned.

Paul Possinger, O'Sulli-van's co-counsel in Chicago, Ill. said SEA has 20 days from the time they were served the complaint to reply.

While O'Sullivan awaits an answer to its complaint, Calton remains positive about a company making the move to Lamar. "Obviously, we want to get an industry in here," he said. "We'll keep our fingers crossed that this thing will come to fruition."