City officials should be careful not to go overboard in what it gives Evan R. Daniels, who heads both Gulf Street Partners and Polymer-Wood Technologies. Daniels has a history of making big promises and then failing to deliver.
This was first noted in the Nov. 4, 2007 Turner Report. This is what I wrote:
Lamar residents, still reeling from the closing of O'Sullivan Industries earlier this year, were thrilled recently when it was announced that Dallas-based Polymer-Wood Technologies would take over a portion of the O'Sullivan plant and hire up to 475 workers over an extended period of time.
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.
A description of Daniels' plans for Lamar was featured in an Oct. 24, 2007 Lamar Democrat article written by Richard Cooper:
"Area I of the redevelopment project will renovate an existing 518,000 square foot building bounded by Gulf and 21st Streets to create a state-of-the-art fully automated wooden door manufacturing facility to be occupied by Polymer-Wood Technologies of Dallas, Texas. Evan Daniels, CEO of Polymer-Wood Technologies, was present at the meeting and indicated that he intended to move his principal manufacturing and distribution point to Lamar. According to Daniels, his operation (also known as Gorilla Door) should eventually create 475 new jobs, although that number will be phased in over several months as the transfer is made. Polymer-Wood Technologies will lease its operational space from SEA. Area I is scheduled to begin and be completed in 2008. Total developer cost is estimated at approximately $41,460,000."
According to Melissa Dunson's article in the Joplin Globe, the Dallas company's plans hinge on receiving tax credits made possible by the passage of the economic package sponsored by Rep. Ron Richard, R-Joplin:
"Evan Daniels, president and chief executive officer of Polymer-Wood Technologies, emphasized that the deal was hinging on the economic incentives, but Lamar Mayor Keith Divine said the plan has approval from all the needed groups and he thinks every member of the City Council realizes how crucial the new business is.
“ 'Right now this means everything to us,' Divine said of the pending sale. 'Things haven’t been very good here for business for the last three or four years, pretty much since (O’Sullivan) declared bankruptcy. I think just about everybody (on the council) realizes the criticality of this thing going through.'
"Divine said he’s pleased with Polymer-Wood’s business plan not only because it gets the company into Lamar quickly, but because there’s planned growth in the region.
“ 'There’s plans for as many as four other spec buildings between now and 2016,' he said."
Evan Daniels' previous business, Trio Industries, manufactured doors, counter tops, and vanities, ran into considerable financial problems, according to court documents.
Trio borrowed $108,000 from Charter Capital Management on Aug. 22, 2005, at a time when Daniels was still company president, and never repaid the money. Last month, U. S. District Court Judge Shira Scheindlen ordered Trio to pay 785,778.90, plus turn over millions of shares it had promised as collateral on the loan.
Charter Capital was not the only company Trio promised a cut of the company, according to documents filed in U. S. District Court for the Southern District of New York. In 2003, it had borrowed up to $1 million from Merit Capital. According to the petition:
"Desperate for money, Trio Industries Management borrowed hundreds of thousands of dollars from Merit Capital, but has flatly refused to repay the money."
ShareSleuth, a website featuring business news, also did some digging into Trio Industries, and found the company also left a lot of unpaid debts over the years before it finally declared bankruptcy this year. This passage comes from Sharesleuth's Oct. 26, 2006, edition:
"Trio went public in 2004 through a reverse merger with a shell company. Its stock trades infrequently, and in low volumes. The most recent trade was Oct. 13, at a price of $3.50 a share, according to Pinksheets.com.
"Trio acquired an idled carpet plant in Greenville, Miss., earlier this year, according to news outlets in that region, and said it would spend $3.5 million to convert the factory to a coating center.
"Sharesleuth’s investigation turned up several questions about Trio and its prospective value. Lawsuits filed in city, state and federal court in Dallas over the past few years show that Trio has been sued repeatedly for nonpayment of debts. The suits include efforts to collect delinquent payments for office furniture and temporary staffing. The latter case was filed in February.
"In its biggest pending case, Trio is fighting a creditor who is claiming the rights to 30 million shares of stock that were pledged as collateral for a loan and represent a majority stake in the business.
"Sharesleuth also found that two of Trio’s top executives have previously run afoul of securities regulators. And the company’s former president said in an affidavit in March in one court case that he went to the SEC with concerns that Trio was deceiving investors.
"Trio did not respond to questions submitted by Sharesleuth.
"Trio’s chairman, Robert E. Gyemant, previously was charged by the SEC with insider trading. The agency alleged in 1982 that Gyemant and two other directors of a San Francisco-clothing chain sold stock ahead of that company’s bankruptcy filing. Gyemant settled the charges without admitting or denying guilt, and agreed to a permanent injunction barring future violations.
"Trio’s vice president and secretary, Brian N. Johanson, was disciplined by securities regulators in California and Virginia in the late 1990s in connection with the unregistered sale of stock in two other small companies.
"California regulators issued a cease-and-desist order against him.Virginia regulators assessed a $79,000 penalty against Johanson and a $224,000 penalty against his company, BLB Financial Inc. of Solana Beach, Calif. They agreed to waive the penalties if all of the investors in the state who bought shares from Johanson’s firm got their money back.
"At the same time that Trio is trying to get its Mississippi plant up and running, it is working to block a New York financier who says he is entitled to 30 million shares of stock it pledged as collateral for a loan it did not repay on time.
"The suit claims that Trio, in August 2005, was willing to pay $8,000 in interest, plus 200,000 shares of stock, for a one-month loan of $100,000. Trio also agreed to put up the 30 million shares in the company as a guarantee. Trio said in court filings that it was unaware its financier was a convicted felon. The company added that the lender, Beryl Zyskind, blocked its attempts to repay the loan so that he could claim the collateral.
"In an unusual legal maneuver, Gyemant sought a temporary restraining order in January against his own company, asking a judge to block any transfer of shares to Zyskind or his company, Charter Capital Resources Inc. Gyemant argued that he would be harmed financially and his majority stake “eviscerated’’ if Zyskind gained full control of the stock, which the filing described as nearly 65 percent of Trio’s outstanding shares. The judge granted the request and ordered Trio to cancel the stock certificate. The case has since been transferred to federal court, where Trio and Charter Resources continue to trade accusations."
The ShareSleuth article had the following information about Evan R. Daniels:
"Evan R. Daniels, Trio’s former president and one of the creators of its original powder-coating technology, said in his affidavit in one of the lawsuits that he asked Gyemant to resign after witnessing him 'lie and deceive investors.' Instead, Daniels said, Gyemant changed company bank accounts, held meetings without him, stopped paying him and told others that Daniels was responsible for all of the problems at the company.
"Daniels said in the affidavit that he reported the situation to the SEC’s district office in Fort Worth. He said its representatives advised him to resign from all positions with Trio and related entities, and to turn in his 7.2 million shares of Trio’s common stock so he would not be 'considered a co-conspirator in the actions of Mr. Gyemant.' "
“ 'I was, at that time, the single largest investor and shareholder within the entire Trio Industries group of companies,' Daniels said in his filing. 'Every available dollar that I inherited or earned was in the companies as capital or loans.'
"Gyemant, who had also worked with Daniels at a California company called Modular Office Solutions, which was founded by Daniels, responded to Daniels' charges by accusing him of theft of corporate property and stealing trade secrets.