Orangeburg's Zeus Industrial Products Inc. is suing Mayer Industries Inc., saying that it doesn’t want to buy Mayer’s former manufacturing facility anymore.
Zeus, a maker of polymer tubing, filed its lawsuit against Mayer Industries on Jan. 7.
Mayer CEO George Fischer said, “We don't comment on ongoing litigation.”
Zeus spokeswoman Jennifer McQuesten also declined comment.
Zeus entered into a purchase agreement for Mayer’s property on Industrial Boulevard in February 2019. They agreed Zeus would purchase the property if no material adverse conditions were discovered.
Zeus’s complaint against Mayer alleges that volatile organic compounds were found in the property's soil which “directly and materially impacts Zeus's proposed use of the property.” Zeus says it constitutes a material adverse condition that justifies Zeus's termination of the agreement.
The complaint also says that Mayer needs to return the $290,000 in earnest money Zeus placed toward the purchase of the property. It alleges Mayer has refused to return the money.
Zeus expressed interest in purchasing the Mayer Industries property after Mayer announced it was closing its facility after 50 years in Orangeburg.
Mayer said it was consolidating its manufacturing operations at its German headquarters. Mayer Industries employed about 59 in Orangeburg County, according to the Orangeburg County Development Commission website.
The Industrial Boulevard property is near two existing Zeus facilities: the Zeus sales and marketing building and the Frank P. Tourville, Jr. Engineering Center of Excellence.
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According to the complaint, Zeus and Mayer entered into sale negotiations and as part of the negotiations Zeus engaged Newkirk Environmental Inc. to conduct a site assessment in accordance with federal requirements.
The assessment allegedly found three recognized environmental conditions on the property, including “drums of waste oil that have the potential to overfill and spill onto surrounding pavement, trays that collect runoff from the solid waste bin ... contain what appears to be petroleum along with rainwater runoff, and groundwater monitoring wells found onsite indicate there could possibly be past groundwater contamination.”
Zeus filed a voluntary cleanup contract with the S.C. Department of Health and Environmental Control and hired Charleston-based S&ME to conduct the environmental studies requested by DHEC.
The due diligence, which cost Zeus about $156,000, was to ensure the property was in line with state regulations.
The complaint alleges that S&ME conducted its initial phase of the work on July 22, 2019 and identified existing contamination in the soil and groundwater of the Mayer property, including volatile organic compounds.
Zeus requested Mayer provide information on the testing of existing groundwater wells. Mayer provided a September 2011 report on sampling from the existing wells in an August 2019 email.
"In forwarding the 2011 report, Mayer indicated that it was embarrassed that the information had not been provided to Zeus earlier," the complaint states.
Additional study allegedly revealed volatile organic compounds in “the soil beneath the facility building at concentrations as high as 200 times the United States Environmental Protection Agency” levels.
Zeus provided notice of the material adverse condition on Nov. 6, 2019, triggering Mayer's obligation to cure the condition within 30 days, the complaint states.
The complaint states that Mayer, “failed to cure the material adverse condition within 30 days.”
Mayer proposed that the, “sub-slab soil vapor problem could be solved by re-configuring an exterior wall of the building so that the VOC vapor exposure would no longer be an issue within the building,” the complaint said. "This was not acceptable to Zeus”.