Iowa lawsuit seeks $1M from company linked to former Republic owner

  • By Peter Sachs
  • Staff Writer
  • March 12, 2009 @ 1:17 PM

A company linked to the former owner of the Republic Windows and Doors is embroiled in a $1 million lawsuit over the shutdown of a similar factory in Iowa.

Richard Gillman, Republic's former owner, is also president of Echo Windows, which purchased the Traco Windows plant in Red Oak, Iowa, in December.

Red Oak Real Estate, a company owned by Gillman acquaintance Bill Smith, bought the Traco plant's real estate, according to Iowa property records.

Traco sued Red Oak Real Estate last week in district court in Montgomery County, Iowa, accusing Smith's company of defaulting on the mortgage for the plant. Traco held a $1 million lien on the plant as "partial payment" for selling it to Red Oak Real Estate, according to court documents.

Gillman and Echo Windows are not named in the foreclosure lawsuit.

“We think the suit is completely without merit,” says Smith. He declined to elaborate.

The two Des Moines attorneys representing Traco did not return calls seeking comment.

Echo operated for less than two months before Gillman appeared at the plant Feb. 23 and announced it would close immediately. When Gillman closed Republic in December, laid off workers drew national media attention to their plight and eventually won a $1.75 million settlement for lost wages.

In its foreclosure filing, Traco says that because Red Oak Real Estate had not been paying bills at the plant – including utility bills – there is “a danger that pipes will freeze, and that the improvements on the Real Estate will otherwise rapidly deteriorate.”

On March 9, an Iowa judge ordered a company in Des Moines to take over the day-to-day management of the property, including securing the building.

Traco is seeking immediate payment of the $1 million it is owed under the terms of the mortgage and a Dec. 1 promissory note.

Daily News Staff Writer Peter Sachs covers higher education. He can be reached at 773.362.5002, ext. 18

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