Local investor group Shawnee Tubing Real Estate (STRE) is headed into a court hearing today hoping to receive a ruling that would require newly branded Shawnee Tubing Industries, LLC, (STI) to pay $241,655 in back rent and/or vacate the premises. Local economic development director and STRE Manager Tim Burg said no rent has been paid to STRE (the landlord) at the plant at 41600 Wolverine Road since April.

Local investor group Shawnee Tubing Real Estate (STRE) is headed into a court hearing today hoping to receive a ruling that would require newly branded Shawnee Tubing Industries, LLC, (STI) to pay $241,655 in back rent and/or vacate the premises. Local economic development director and STRE Manager Tim Burg said no rent has been paid to STRE (the landlord) at the plant at 41600 Wolverine Road since April.

In a press release Chairman Leonard Levie of AIAC (owner of STI) claims STRE is evicting STI from its site and threatening the jobs of the 175 employees there.

Background

In May 2017 Wolverine Tube Shawnee — as well as the majority of its operations — was acquired by a newly formed company called Shawnee Tubing Solutions LLC (STS).

Mayor Richard Finley said then-President and CEO Greg Gallman, who was Wolverine's general manager, worked to acquire the company. Gallman, however, short on funds, needed help from locals.

Finley said through a consortium between participating banks, and a significant amount of capital being raised on the local basis, Gallman was able to acquire that company.

Burg said the local investors (STRE) raised just less than $2 million to allow six local banking institutions to provide a real estate loan, which allowed Gallman to borrow enough money from an asset-based lender in Chicago, using the investors funds and the bank loan as equity for the larger loan.

Burg said the real estate was the collateral for the loan from the Oklahoma banks.

“It was also the collateral for the investors,” he said.

The investors were to receive monthly lease payments, which were to be used to pay the loan to the Oklahoma banks, plus the insurance, taxes and the cost of the real estate broker.

Unfortunately Gallman was unable to keep STS afloat and AIAC foreclosed on the plant.

According to letters written by McAfee & Taft Attorney Ross Plourde (representing STRE) on April 27 and June 1, rent payments from STS were overdue and immediate payment was being requested — as per the lease agreement.

STRE's agreed amount on the lease with STS was $48,333 per month in rent; there is no lease yet with STI, Burg said.

Exactly when STS was purchased by AIAC has not been confirmed. Levie said AIAC's restart of the business as STI has kept 175 people employed since July 6.

Burg said AIAC and the STRE have not reached any agreement on lease terms and AIAC is occupying the property on Wolverine Road without a lease.

The court hearing this morning was sought by STRE to secure five months of back rent and/or allow eviction proceedings on the property to continue.

According to court records, AIAC has requested a continuance.

Watch for updates.