O'Sullivan Industries, Inc. is suing the Newport Beach, California, firm for a $1.5 million deposit SEA placed with Chicago Title, which was to go to O'Sullivan in the event the deal fell through, according to the petition.
O'Sullivan officials notified SEA Tuesday that they were terminating the purchase agreement, the lawsuit indicated.
The lawsuit alleges that SEA was responsible for one delay after another, putting off a property transaction that was originally supposed to take place in October, then was delayed until Dec. 22. At that point, "on the eve of the foreclosure sale, SEA suddenly alleged that the property needed repairs in excess of $1 million and that it had no obligation to close the transaction unless (O'Sullivan Industries) complied with its last minute demand to make such repairs."
After that, the foreclosure sale was rescheduled for Jan. 30, with closing set for the following day. On Dec. 20, the lawsuit says, O'Sullivan officials sent SEA a lease application required by Burlington Northern. "Notwithstanding repeated inquiries by OSI's counsel as to the status of the application, SEA failed to deliver the completed application. Instead, on Jan. 16, 2008, nearly a month after having received the lease application, SEA's counsel requested another copy of the application, which was promptly furnished to them that same day."
The application was returned 12 days later, three days before the closing date, making it too late to have it ready, the lawsuit alleges. "Nevertheless, in order to fabricate a basis to avoid having to close the sale, SEA claimed that OSI's inability to deliver the lease at the closing scheduled for Jan. 31, 2007, entitled it to terminate the purchase agreement."
All of this was part of an SEA "scheme" to avoid closing the sale, the petition says. The next step took place when SEA officials claimed the builing needed more than $1 million worth of repairs, despite the fact that on Dec. 21, "SEA expressly acknowledged that the condition of the property was satisfactory. Because of this disagreement, the foreclosure date was pushed back again, this time to Feb. 26.
"SEA refused to avail itself of this opportunity and, instead, purported to terminate the purchase agreement and demanded a return of the deposit on Feb. 15, 2008."
When Structured Equity Advisors first came on the scene last year, it appeared the company was the answer to the prayers of a city that had been financially devastated by the closing of O'Sullivan Industires and the loss of hundreds of jobs.
The company was going to buy the vacant O'Sullivan building and lease it to other companies, the first of which was going to be Polymer-Wood Technologies, a Texas firm fronted by Evan R. Daniels, whose connections with a company which had a checkered history of promising jobs to communities and then failing to deliver.
Daniels' background was revealed in the Nov. 4, 2007 Turner Report:
However, court documents indicate that the last company managed by Polymer-Wood Technologies CEO Evan R. Daniels, Trio Industries, ended up in bankruptcy with disappointed folks in Greenville, Miss, and Kalamazoo, Michigan, who had counted on manufacturing jobs that had been promised to them.
And in documents filed Oct. 13, 2005, in U. S. District Court for the Southern District of New York, Daniels' former partner, Robert E. Gyemant, accused Daniels of "theft of corporate property, unjust enrichment, misappropriation of trade secrets and tortious interference," with Trio after the two partners had a falling out.