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Academy suit says repairs not made

June 20, 2002|by SCOTT BUTKI

scottb@herald-mail.com

Role Models America, Inc. has filed a $1.8 million lawsuit against its landlord, PenMar Development Corp., contending PenMar did not do required repairs on land it leased on the former Fort Ritchie U.S. Army base.

The civil suit alleging breach of contract was filed in U.S. Bankruptcy Court in Greenbelt, Md., on Friday.

PenMar Board Chairman Brett Wilson has denied PenMar breached its lease or owes Role Models any money.

The lawsuit asks for an injunction to allow Role Models to stay on the base until the lawsuit is resolved.

Role Models, a military-style academy for high school dropouts, on May 10 filed for Chapter 11 bankruptcy, which frees it from the threat of creditors' lawsuits while it reorganizes its finances.

Since March 2000, Role Models has subleased 253,000 square feet from PenMar for about $1.3 million a year.

The suit contends Role Models has been unable to use about 120,000 square feet of the 253,000 square feet it is leasing because PenMar has refused to make improvements and repairs needed for occupancy.

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The lawsuit said PenMar should pay Role Models $1.8 million for overpayment of rent and utilities for buildings and services not provided, including $450,493 for renovations PenMar failed to make.

Wilson has said PenMar will make the repairs when Role Models specifies what work needs to be done.

PenMar alleges Role Models violated the sublease by failing to pay rent and utility expenses on more than one occasion.

Role Models President Robert Alexander has said Role Models should not have to pay some rent and utility expenses because it was being charged for land it could not use.

The suit names each member of the PenMar board of directors individually since Role Models argues that PenMar is not a legal Maryland corporation.

PenMar says it is a legal corporation.

The Maryland General Assembly created PenMar in 1997 to bring in businesses to replace the 2,000 jobs lost when the base closed in September 1998.

A similar $20 million breach of contract lawsuit filed by Role Models is pending in Washington County Circuit Court.

Role Models and PenMar have been involved in a series of legal disputes. As a result of one ongoing dispute, Role Models' bankruptcy filing put a stay on any action PenMar might take against Role Models, including eviction.

On Monday Bankruptcy Court Judge Paul Mannes verbally approved a motion from PenMar asking that a stay on the lease be lifted, which will allow PenMar to proceed with plans to evict Role Models. He signed the written order for the motion on Wednesday, court staff said.

Alexander has said he will appeal the judge's decision.

The school operated on a two-year, $10 million U.S. Department of Labor grant that expired June 30.

Alexander has said he is optimistic the school will resume operations this summer with private funding.

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