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Lisa Frank Inc.'s corporate jet is at center of new suit(Arizona Daily Star, The (Tucson) (KRT) Via Thomson Dialog NewsEdge) Sep. 6--In the latest legal battle involving Lisa Frank Inc., the former chief executive of the Tucson-based crafts maker for girls has filed a lawsuit involving the repayment of a $16.7 million loan on a corporate jet. James A. Green, former president and CEO of Lisa Frank Inc. and estranged husband of company founder Lisa Frank, said in court documents that he is not responsible for paying the $16.7 million refinanced loan taken out on the Cessna 750 Citation. Green also alleges that Lisa Frank Inc., a privately held company, is attempting to sell the airplane and will not use the money from the sale to repay the loan. The new lawsuit, filed Aug. 30, is the fourth suit to emerge in the past year involving Lisa Frank Inc. and its namesake and majority owner, including the couple's pending divorce. Green said the loan is the responsibility of Lisa Frank Inc. and a subsidiary, Greens Comet LCC. The court documents state that in October 1998, Greens Comet bought the 12-seat, twin-engine airplane for $17 million. A registration listing by the Federal Aviation Administration and court documents describe the plane as a Cessna 750 Citation X, built in 1998. The recent lawsuit is asking for a lien to be placed on the Cessna to repay the loan and to release Green from repaying the loan, which is now due, according to court documents. The airplane was originally financed through an aircraft loan and security agreement between Greens Comet and a leasing corporation. In April 2004, the original airplane loan was refinanced, according to court documents. At that time, Green's filing states, the loan's $11 million balance was paid off by Lisa Frank Inc. and Greens Comet from proceeds of another loan from UBS Bank U.S.A., according to the court document. In December 2004, the UBS loan was refinanced with a loan from Smith Barney CitiGroup to Lisa Frank Inc. and Greens Comet. However, Lisa Frank Inc. has said the loan was actually paid off by a "capital contribution" from Green and Frank, not through proceeds from UBS Bank, Green's lawsuit says. In the suit, Green is asking that the court declare that the original loan was repaid from proceeds of the UBS loan and not through contributions by Green and Frank. Alternatively, Green is asking the court to place on a lien on the plane to secure repayment of the Smith Barney loan, or to declare him a co-lender on the loan with Frank to allow him to collect the unpaid $16.7 million from the company. Michael R. King, an attorney representing Lisa Frank Inc., said the recent lawsuit is being reviewed. Green's attorney, John Iurino, said he would not comment on the case. The new lawsuit comes as Green, Frank and a former Lisa Frank Inc. executive, Rhonda Rowlette are engaged in legal battles over the company. Frank, for example, asked that Judge Deborah Bernini hold Green in contempt for removing "truckloads" of property from the company's headquarters. Green responds that Frank's "conduct has been far less than exemplary." Rowlette has sued Lisa Frank Inc., alleging that the company owes her an oft-promised $2 million, a claim Frank rejects. That case was filed in Pima County Superior Court and moved to U.S. District Court, but Rowlette is asking that it be returned to Superior Court. Frank, who married Green in 1994, filed for divorce in September 2005. Green agreed to step aside as president and CEO of the company, but Frank later filed a state lawsuit to buy back 49 percent of company stock that Green owns, saying the divorce proceeding allowed her to buy back the stock. In court documents, Lisa Frank Inc. also said Green was working with Rowlette to form a new company that would compete against Lisa Frank Inc. To avoid contempt charges, Green was told in May to return six computers taken around the time he left the company in October. The company said Green copied company computer files and artwork to start the competing business, according to court documents. Green has denied any wrongdoing. In the past decade, Lisa Frank Inc. sold more than $550 million in merchandise to retailers such as Wal-Mart and Target, according to court documents filed by Green in Pima County Superior Court. The company began by making stickers and has branched into clothing, backpacks and stationery. The company employs about 80 people in Tucson, according to court filings by Green. --Contact reporter Levi J. Long at 573-4179 or [email protected]. Copyright (c) 2006, The Arizona Daily Star, Tucson Distributed by McClatchy-Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |