The Smith Giles law firm in downtown Graham has found itself on the odd side of a civil suit: as one of the defendants in a lawsuit that has been filed in Alamance County superior court to recover funds that it held in escrow during the purchase of the plaintiff’s company in early 2021.
The lawsuit filed late last month by Jet Logistics Technical Services of Johns Island, South Carolina, and the company’s former owner, W. Ashley Smith, Jr. Jet Logistics had been based in North Carolina and repaired piston and turbine jet aircraft until February 2021, when the company was sold to Victory Lane Aviation of Charlotte for $350,000, according to the court file.
Following the sale, Victory Lane transferred $70,000 in escrow funds to the Smith Giles firm, which was acting as the escrow agent for the sale. Victory Lane has since “wrongfully made a claim” against the escrow funds and prohibited the law firm from transferring the escrow money to the seller, the lawsuit alleges.
The plaintiff is asking a judge to declare that he is legally entitled to the escrow funds, in addition to award for more than $25,000 in damages against Victory Lane for alleged unfair and deceptive trade practices and conversion, as well as recovery of his court costs and attorneys’ fees. The complaint notes that the suit was filed in Alamance County because the escrow funds were transmitted to the Smith Giles law firm in Graham at the time of the sale.
Jet Logistics had operated out of hangers at the Charlotte Douglas Airport and Raleigh-Durham Airport until the company was sold in December 2020 and finalized in mid-February 2021, according to the court file.
Victory Lane had also expressed interest in purchasing a Hawker aircraft, which contained an intact landing gear and landing gear assembly — but had been stripped of $60,000 in avionics parts — and was being stored in a hanger at Charlotte Douglas Airport.
Jet Logistics also agreed to sell the Hawker Aircraft, but not the avionics parts, to Victory Lane. Those parts were not to be included in the sale of the company or the aircraft, according to the complaint.
Victory Lane later purchased the aircraft, but not the parts, which Ashley Smith, Jr. inadvertently neglected to remove from the hanger in Charlotte after the sale. The seller (Smith) now contends that Victory Lane has taken possession of those parts and has repeatedly refused to return or pay for them, the suit asserts.
Meanwhile, Victory Lane has alleged that Smith breached the purchase agreement by “misplacing” 14 work orders and two inspections for repairs to 13 aircraft, deficiencies which Victory Lane claims led to more than $50,000 in lost revenue between the time of the sale in February 2021 and July 2021, the complaint notes. Jet Logistics contends that Victory Lane used its claims about discrepancies in the seller’s “accounts receivable” as a pretext to prevent the escrow funds from being transferred, according to the lawsuit.
Under the terms of the purchase agreement, the escrow funds were to have been released to Ashley Smith, Jr. within 180 days after the closing date, according to the suit filed by Smith and Jet Logistics.
The complaint describes the Smith Giles law firm as a “nominal defendant” in the dispute.
In addition to an award for damages against Victory Lane, Jet Logistics is seeking a jury trial and recovery of its court costs, as well as an order requiring the $70,000 in escrow funds to be turned over to the plaintiff.
Ashley Smith, Jr. and Jet Logistics are being represented by Patrick Kane and Craig Turner of the Fox Rothschild law firm in Greensboro. (Turner also serves as an Alamance County commissioner.)
Victory Lane Aviation had not filed a response by press time.
See coverage of other recent lawsuits filed in Alamance County superior court:
Graham city manager files suit against town council member in Rural Hall where she used to work: https://alamancenews.com/graham-city-mgr-files-lawsuit-against-town-council-member-at-her-previous-job/
Samet files lawsuit charging architect, contractor with inferior work on Elon building: https://alamancenews.com/graham-city-mgr-files-lawsuit-against-town-council-member-at-her-previous-job/
Graham developer sues prospective tenant that never occupied building that was upfitted for the company: https://alamancenews.com/graham-developer-suing-tenant-over-unpaid-rent-and-renovation-costs/