Web producer- Houston Business Journal
A former Sugar Land mayor has filed for bankruptcy, and the city of Joplin, Missouri, has sued his Sugar Land-based development firm, according to reports.
David Gordon Wallace Jr. filed for Chapter 7 bankruptcy on March 24 in U.S. District Court in Houston.
According to the filing, Wallace lists estimated debt of $10 million to $50 million and estimated assets of $500,000 to $1 million. He also estimates his number of creditors at 200 to 999. The filing includes 46 pages of creditors, including the city of Joplin and approximately six companies and individuals with Joplin addresses.
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On March 25, the city of Joplin sued Wallace Bajjali Development Partners, along with Wallace and his ex-partner, Costa Bajjali, for $1.5 million, the Joplin Globe reports. The lawsuit, which was filed in Jasper County Circuit Court in Missouri, alleges fraud, the Globe reports.
After an EF-5 tornado ripped through Joplin on May 22, 2011, the city hired Wallace Bajjali as master developer for the town’s redevelopment. In January, reports indicated the company had vacated its office in Joplin and in Sugar Land.
Also that month, both Bajjali and Wallace resigned from the firm and sent separate letters of resignation to several parties, Houston Public Media reports. The radio station posted both letters on its website.
Joplin terminated its contract with the company after receiving those letters, the Globe reports. Joplin could ask the bankruptcy court to not discharge Wallace’s debts to the city because of the alleged fraud, the city’s attorney told the Globe. However, the attorney did not know whether Joplin would seek to do so.
Olivia Pulsinelli is the web producer for the Houston Business Journal’s award-winning website. Follow her on Twitter for more.