Appalachian Bible College is suing a Pennsylvania company in federal court claiming it failed to honor a donor commitment.
The school in Mount Hope in Raleigh County says Foremost Industries pledged $4 million before the company was sold.
Ralph Michael made a deal to sell his manufactured homes company in May 2015 below what it was worth as long as the buyer honored his commitment to the school, the lawsuit states.
The asking price for Foremost Industries was $10 million, but Michael agreed to sell it to Daniel Gordon for $3 million plus the $4 million Michael had promised the school, according to the complaint. Gordon allegedly led Michael to believe he intended to continue to operate Foremost Industries, keep the employees working and satisfy the gift agreement, when he really had no such intention, the lawsuit states.
The first payment that was allegedly due in April on the gift agreement was never paid, according to the complaint.
The school, which is represented by the firm Pullin Fowler Flanagan Brown & Poe, says the gift agreement was to act as an inducement for other donors to make contributions for its charitable purposes. The breach of the agreement has therefore prevented other donations and gifts, the lawsuit alleges.
The school argues the company legally is obligated to pay it the money. No one from the company could be reached Friday for comment. The lawsuit is assigned to U.S. District Judge Irene Berger.
The lawsuit also says that Michael didn't know when he sold the company to Gordon that in 2005 Gordon was sentenced to spend 42 months in federal prison for wire fraud, money laundering and conspiring to falsify books and records.
"It is clear from Daniel Gordon's past and present actions and the actions and representations of Foremost Industries Inc. that Foremost Industries Inc. has no intention of complying with the Gift Agreement," the lawsuit states.
Reach Kate White at kate.white@wvgazettemail.com, 304-348-1723 or follow @KateLWhite on Twitter.