Columbia faces second suit
Published 5:00 am Thursday, May 10, 2007
- Lance Neibauer
The founder of Bend-based Columbia Aircraft Manufacturing Corp. has filed another suit against the company he founded – six months after he sued the airplane maker for up to $1.55 million in severance pay.
Lima Development Inc., owned by Columbia founder Lance Neibauer, is suing the airplane maker for $100,000 and other associated legal costs stemming from an agreement made between the two companies in 2002.
Neibauer is a shareholder in Columbia through Lima.
The 2002 agreement allows Columbia, then called Lancair, to have proprietary rights to composite technology developed by Neibauer for the airplane maker, said Lynn Stafford, Lima’s Portland-based attorney.
Stafford added, however, that the agreement also required Columbia to pay Neibauer $500,000 over five years if the airplane maker terminated its relationship with Neibauer.
The payments, to be made in $100,000 increments, were to start a year after Neibauer’s termination, according to the suit, which was filed earlier this month in Deschutes County Circuit Court. Columbia ended its employment with Neibauer in April 2006, and Lima’s attorney said the first payment should have been made last month.
Columbia officials declined comment, citing the ongoing legal action.
”Certainly, we had an inkling that they weren’t going to pay,” Stafford said, noting that Lima had not received the first $100,000 as of Wednesday.
”But we couldn’t file anything because the payments didn’t become due until recently.”
Neibauer, who still lives in the Bend area, said he doesn’t understand why Columbia has not paid.
”We think it seems pretty straightforward,” he said.
In December, Neibauer and Lima sued Columbia for severance pay, saying that the 2002 agreement guaranteed the founder termination pay if Neibauer’s employment was ended without cause or mutual consent. Those payments also have not been made, Neibauer said.
The previous suit also said the 2002 agreement required Columbia to create a fund to eventually purchase Neibauer’s stock in the company. That fund was never established, the previous suit said, and Neibauer wants it set up so Columbia would have money to purchase his shares when he decides to sell.
That case is still going through discovery, although Neibauer says he hopes to get a court date soon.
Columbia is not to be confused with Redmond-based Lancair International Inc., a kit plane maker that also was founded by Neibauer but has no connection to the case.
The most recent suit against Columbia said Lima also is seeking declarations from the airplane maker that additional $100,000 payments are due annually from 2008 to 2011.
Neibauer founded Columbia in 1995, but the company had problems lining up investors until 2003, when Composite Technology Research Malaysia Sdn. Bhd. acquired controlling interest in the airplane maker. Composite Technology Research, also known as CTRM, is backed by the Malaysian Ministry of Finance.
Under CTRM, Columbia has recently gone through a number of major changes, reducing its work force from more than 700 employees last year to 360 after Tuesday’s announcement that it is bringing back 25 of 185 people who were temporarily laid off in March. Most of the additional 160 employees are expected to be recalled over the next few weeks. The workers were furloughed in March while the company worked off inventory and improved production processes.
The company also is undergoing management changes. President and CEO Bing Lantis announced in March that he was stepping down to tend to family matters. Wan Abd Majid, a Malaysian native who has worked with Columbia since the two parties became involved in the 1990s, has been appointed the new CEO.
Regardless of management changes, attorney Stafford said the 2002 agreement is clear about Columbia’s responsibility to Neibauer.
”Our position is that they haven’t paid, and they don’t think they need to pay,” she said. ”But we feel that they are obligated under the agreement.”