Coon filed five claims against Perticarini, including fraud, fraudulent misrepresentation, and fraudulent concealment, related to forming a new business venture and securing performance and payments bonds, commonly referenced as P&P Bonds.
The lawsuit was filed in Stark County on Oct. 6, as Perticarini resides there, and the alleged conducted activity mostly occurred in the northern Ohio county.
Coon, of Louisville, Ohio, claims in the suit he and officials with his company, Hourglass Holdings, LLC, were led to believe their interest in investing in a new venture called &Build Investors would allow them to participate in PCS Companies’ operations and profits. Coon was required to invest $3.5 million, which included $2 million from investors.
With finances in hand, a stock purchase agreement was drafted on Jan. 27, 2020, between PCS and &Builders Investors, with 402 shares of PCS stock to be acquired by &Build Investors for a little more than $1 million. However, the suit claims that three days later, Perticarini called a PCS board of directors meeting where 402 shares of stock were transferred to him personally, not &Build Investors, in exchange for the same cash amount.
Coon claims Perticarini concealed this purchase. The failure to transfer the stock to &Build breached the stock purchase agreement.
This is where Spooky Nook Sports Champion Mill enters this partnership. On March 20, 2020, PCS &Build, a subsidiary of &Build Investors, signed the contract to be the general contractor for the $165 million Spooky Nook Sports Champion Mill project, which was expected to be $120 million at the time. PCS &Build was required to obtain the P&P Bonds, but Coon claims before January 2020, PCS nor PCS &Build had the required finances to obtain said bonds without receiving additional capital.
The $2 million loan from the investor brought in by Coon was dated April 9, 2020, nearly three weeks after the Spooky Nook project contract was signed.
The lawsuit also claims Perticarini misrepresented the ownership makeup of &Build Investors to the bonding agent for the Spooky Nook project. The ownership of &Build Investors was supposed to be an even split, but Coon said that was not true. The lawsuit claims on April 30, 2020, neither Coon, his company Hourglass Holdings, nor &Build Investors own any of those 402 shares of PCS stock as the P&P bonds were issued for Spooky Nook.
On Feb. 10, 2023, PCS &Build filed its first lawsuit against Spooky Nook, and its second lawsuit on July 12, 2023. Subsequently, 11 subcontractors filed suits against Spooky Nook for their work. It was during this process that Coon became aware of the alleged fraud and breach of contract.
The project’s surety company had contacted Coon on Sept. 8, 2023, asking him to provide collateral to secure PCS &Build and the project’s subcontractors, who are collectively seeking more than $22.3 million, with nearly $15.9 million being sought by PCS &Build.
Because Coon never owned any of the PCS stock, he believes he should have been removed from the General Indemnity Agreement (GIA), a contract between a surety company and the principal looking to obtain credit. According to the lawsuit, the GIA signatories may have to indemnify the surety.
An order was issued for a special process server last week. Defendants have 28 days to respond to the complaint, according to the court.
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