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Archive for Monday, May 4, 1998

CONTRACTOR HOPES TO SETTLE BREWERY TAB

May 4, 1998

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Harris Construction Co. Inc. built a brewery for $1.1 million, but still hasn't been paid for half of the work.

A Lawrence contractor still hasn't been paid for $560,000 worth of work on the Sports Page Brewery, and wants a federal bankruptcy judge to do something about it.

Harris Construction Co. Inc., the general contractor for the brewery project, has asked U.S. Bankruptcy Judge James A. Pusateri to hold the brewery's owners and landlord in contempt for nonpayment. A hearing is scheduled for May 28.

Harris hopes the judge will force Sports Page Brewery L.L.C. and its landlord, R.D. Equities, to pay up.

``Harris Construction Company is pretty straightforward: We built a building, the owner has it, is using it, is making money and Harris needs to be paid, just like everybody else has to pay their contractor,'' said Stu Entz, a Topeka attorney for Harris. ``Most people have to pay for buildings we build. These people (the owners) take the position: `Why don't you take 50 cents on the dollar and call it even?' And we won't accept that.''

The bankruptcy case, along with a related foreclosure case headed for trial later this year in Douglas County District Court, are the remnants of a botched business deal that has left dozens of contractors, several banks and others fighting for control of the brewery's assets, which literally almost went up in smoke during an attempted arson in December 1996.

The brewery's developer, Allen Salah, left town less than two weeks later -- just before his Brauereihaus business was forced into involuntary bankruptcy -- and today is presumed to be in his native Bahrain. The financial mess he left behind, which follow Salah's previous convictions and prison terms for bank fraud and other crimes, is now in the hands of attorneys, a bankruptcy court trustee, Judge Pusateri and Douglas County Dist. Judge Paula Martin.

New owners

Harris says it is owed $560,000, the balance of its $1.1 million construction contract. The company wants Nabil Saleh, who heads Sports Page L.L.C., and Jack Rose, who heads R.D. Equities, to pay the full balance.

Entz, the Harris attorney, contends that the money is needed to pay off the company's 15 to 20 subcontractors, who together are owed more than $300,000 for installing furnishings and other fixtures and equipment at the brewery, which is in full operation and making money at 3512 Clinton Pkwy.

Saleh has offered to settle the contract for $280,000 -- half what the company is owed -- but Harris isn't about to accept, Entz said.

``They're trying to get a million-and-a-half-dollar brewery for a lot less, at the expense of a contractor, a lot of subcontractors and creditors,'' Entz said.

In court papers, Entz chided Rose and Saleh for ``arrogance'' in dealing with the court, and for not adhering to an ``implicit'' agreement to pay off the Harris debt. For such actions Entz wants the bankruptcy court to impose ``severe sanctions,'' including paying off the debt, plus interest and all legal fees.

Owners dispute claim

R.D. Equities doesn't buy it.

The company, which developed the Parkway Shopping Center where Sports Page is located, isn't responsible for paying anything to Harris, said Thomas Lassater, a Wichita attorney for R.D. Equities. That responsibility falls with Sports Page L.L.C., which took over the troubled brewery last year and now pays rent to Rose's company.

Harris is welcome to fight for its money in district court, but not at the bankruptcy court in Topeka, Lassater said. The bankruptcy court approved Saleh's deal, which does not include any concrete requirement that Harris be paid in full.

He said that Harris' ``overbuilt'' work, which produced a ``Taj Mahal'' brewery, shouldn't force the landowners to pay up.

``The landlord wants to get this behind us. We want to get this resolved,'' Lassater said. ``I don't begrudge Harris for being a little frustrated. The problem is Harris is the one who took the credit risk for doing this building for Brauereihaus. Brauereihaus went bankrupt. Brauereihaus can't pay.''

Evan Ice, a Lawrence attorney representing Sports Page in the foreclosure case, said his clients still wanted to resolve the case amicably, Harris' ``aggressive'' legal tactics notwithstanding.

``The bottom line is it's a bankrupt corporation that owes Harris a bunch of money and Harris is trying to go after anyone else they can think of to get it,'' Ice said. ``We don't think it's right.''

-- Mark Fagan's phone message number is 832-7188. His e-mail address is mfagan@ljworld.com.

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