On a date prior to May 29, 2015, Foremost Industries entered into a gift agreement with Appalachian Bible College for a donor commitment in the amount of $4 million, according to a complaint filed July 28 in the U.S. District Court for the Southern District of West Virginia.
On May 29, 2015, Daniel Gordon, who had expressed interest in acquiring Foremost, entered into a stock purchase agreement with Ralph C. Michael for the purchase of Foremost.
Although the asking price for Foremost was $10 million, Michael agreed to sell Foremost for $3 million and an agreement to satisfy the gift agreement between Foremost and Appalachian Bible College, according to the suit.
Appalachian claims Gordon 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 first payment on the donation was supposed to be given in April and was never received.
Appalachian claims the gift agreement was to act as an inducement for other donors to make contributions for its charitable purposes and the breach of the agreement has prevented other donations and gifts.
The defendant breached its contract with the school and has caused Appalachian damages, according to the suit.
Appalachian claims Foremost is legally obligated to pay the money, since it made the gift agreement.
Appalachian is seeking compensatory damages. It is being represented by J. Victor Flanagan and Ashley L. Justice of Pullin, Fowler, Flanagan, Brown & Poe PLLC.
The case is assigned to District Judge Irene Berger.
U.S. District Court for the Southern District of West Virginia case number: 5:16-cv-06781