By Traci Chapman
A Yukon newspaper has become the subject of a $1.27 million lawsuit and accusations of non-payment, breach of contract, deceit and fraud.
The case began May 30, when former Yukon Review owner John Miller, through his business interests, filed two Canadian County civil court actions against current Review owners Star Communication Corporation and John and Paula Settle, of Kansas.
The Settles and Star also own the Mustang News.
According to court documents filed by both parties, the conflict arises out of two documents executed by them at the time Miller sold the Review to Star and the Settles in the spring of 2015.
Documents in question were June 30, 2015 asset sale and real estate purchase agreements, which set out the terms of the sale of the newspaper and its assets, as well as the Review office, located on South 5th Street in Yukon.
In his court filing, Miller incorporated copies of documents allegedly signed by Star and the Settles. Those include a $725,000 promissory note for the newspaper, a portion of its accounts receivable at the time and other assets and a second $525,000 agreement for the purchase of the Review lot and building.
According to the asset agreement, Star was required to make a one-time interest only payment on Jan. 1, 2016 and 180 monthly principal and interest payments each month following. Court documents revealed the Settles personally guaranteed the note.
Miller asserted in his petition Star has been in default since April 2016.
The real estate purchase required a $50,000 down payment at closing and 181 monthly installments for the $475,000 balance – a one-time interest only payment of $11,972.51 on Jan. 1, 2015 and 180 monthly payments in the amount of $3,756.27.
Miller contended in his petitions Star and the Settles “have been in constant default since April 1, 2016;’ the real estate note has been in default since Jan. 1, 2017, according to that petition.
Miller requested the court award him $801,968.64 in current principal and interest due on the asset purchase agreement and another $462,584.83 on the real estate contract, plus daily accruing interest, late charges, attorney fees and costs on both alleged outstanding debts.
Miller’s petitions are only the beginning, however. On June 1, Star and Settles filed their own pleading with the court, a Cross-Claim against Miller and his wife, Kathy, and third-party petitions against Miller, his wife and the business interest which held title to the Review’s office building and real estate.
In their filing, Star and the Settles contended Miller failed to disclose several matters, alleging that lack of pertinent information meant Miller breached the contracts between them.
According to the purchase agreement, Miller transferred to Star/Settles 20 shares in an Oklahoma City company, Suburban Graphics, Inc. Star contended Miller did not divulge that Suburban Graphics was facing “pending threatened litigation…which negatively affected the value of SGI stock.” Attempts to learn more about Suburban Graphics or the related stock conflict were unsuccessful as of press time.
Star also alleged Miller did not give the new buyer credit for prepaid advertising agreements in place at the Review at the time of sale and did not advise Star the Daily Oklahoman was delivering its shopper in the Yukon Area, as well as the fact one of its former employees started a new Yukon business selling billboard advertising.
“This previous employee is now actively selling billboard advertising space to former customers of the newspaper,” Star alleged in its cross-complaint.
Those alleged omissions, Star maintained, amounted to fraud and deceit.
As to the real estate contract, Star and the Settles asserted there were several issues with the Review offices, which Miller allegedly did not mention. Those included the total failure of the building’s air conditioner a month after purchase, a water line turned off because of leaks under the slab and roof issues that caused interior water damage, according to Star’s filing.
According to the real estate agreement, “Purchaser acknowledges and agrees that purchaser has inspected the property and is acquiring the property on a ‘where is’ and ‘as is’ basis with all faults.”
Star/Settles requested $75,000 in relief, as well as punitive damages, attorney costs and fees and other considerations.
“The main point we would like to get across is that had the Millers not fraudulently misrepresented several things, as detailed in the attached pleading, Star would never have entered into the agreements to purchase the Review’s assets or the associated building,” Star Communications and Settle attorney Riley Mulinix stated in a June 5 email.
No hearings have yet been set in the lawsuit.