Pella’s Lawsuit Against Apogee TerminatedOctober 31st, 2019 by Jordan Scott
A lawsuit filed by Pella Corp. alleging that Apogee Enterprises failed to make payments for its June 2017 purchase of glazing systems manufacturer EFCO Corp. has been terminated.
Pella originally filed the suit in the U.S. District Court of the Southern District of Iowa (Central Division) in July 2019. The suit was dismissed with prejudice by all parties involved, meaning it can’t be reopened. This followed several motions for extension of time to respond to the complaint by Apogee over the past three months.
In the original complaint, Pella alleged that despite a stock purchase agreement signed prior to its sale of EFCO, Apogee failed to make $2.5 million payments to Pella on the first and second anniversaries of the closing date, which was June 12, 2017. Apogee’s counsel also informed Pella that Apogee would not be making any of the third installment payment. Apogee purchased all of EFCO’s stock in a sale totaling approximately $195 million.
The second part of the complaint focused on a General Contract of Indemnity (GIC) executed by EFCO, Pella and Travelers Casualty and Surety Company of America in January 2016 for the Wanda Vista Tower Project in Chicago. The James McHugh Construction Co., the general contractor for the project, awarded the curtainwall scope to EFCO under a subcontract in October 2016. Travelers entered into a performance and payment bond in the amount of nearly $69 million regarding the Wanda project in February 2017.
The filing stated that neither Apogee nor EFCO made efforts to secure the unconditional release of Pella and its affiliates from all “‘seller collateral,’ i.e., letters of credit, bonds, and other such obligations of EFCO, and return to Pella such ‘seller collateral.’”
According to the stipulation of dismissal with prejudice document, each party will bear its own fees, costs and expenses related to the suit. Such dismissals are often signs of a settlement, although neither party has given an indication of such.
Pella Corp. and Apogee Enterprises did not respond to [DWM]’s request for comment as of press time.