HUNTINGTON – SWVA, Inc., is suing KES Acquisition Company for breaching its lease agreement and causing damages.

KES Optima Acquisition, Inc., was also named as a defendant in the suit.

On June 1, 2004, SWVA and KES entered into an equipment lease, according to a complaint filed Dec. 5 in Cabell Circuit Court.

During the course of the lease, on more than one occasion, KES sought SWVA’s consent to assign its equipment lease obligations in conjunction with changes in ownership, acquisitions, corporate structure, financing or other concerns to other entities, according to the suit. In each instance, when such consent was requested, KES confirmed its intent to continue to use the equipment and honor the lease, the suit says.

SWVA claims KES timely notified it of its intent to exercise its option and extend the lease term for an additional five years, until 2014, and SWVA and KES computed the adjusted rental payment pursuant to the terms of the lease.

In November, KES advised SWVA that it was going to be the subject of a merger with KES Optima, according to the suit, however, details of the proposed merger transaction and/or the status of the proposed merger transaction were not readily known by SWVA.

SWVA claims the proposed merger transaction would negatively impact and/or eliminate its possibility of future lease income as when the merger is completed, the equipment will be shut down.

KES has breached and/or is in the process of breaching the equipment lease through its actions in entering into a merger without first obtaining required consent from SWVA, according to the suit.

SWVA is seeking preliminary, permanent and/or temporary restraining orders or other injunctive relief from the defendants, immediate payment of all remaining lease installment payments and immediate delivery of the equipment at the defendants’ cost and expense. It is being represented by Thomas E. Scarr, Stephen J. Golder and Gary A. Matthews.

The case has been assigned to Circuit Judge F. Jane Hustead.

Cabell Circuit Court case number: 12-C-797

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