Attorney General's News Release

October 18, 1999

Nixon sues IKON after company defaults on contract to build facility, create jobs in Jefferson City

Jefferson City, Mo. — Attorney General Jay Nixon today filed a lawsuit on behalf of the Missouri Department of Economic Development against IKON Office Solutions for defaulting on its obligations under a 1997 $500,000 state block grant to create 100 new jobs at a new facility in Jefferson City.

Earlier this year IKON announced its intentions to not complete the project in favor of consolidating jobs in Tijuana, Mexico. Nixon is asking the Cole County Circuit Court to order IKON to pay all appropriate penalties for breaching its contract.

"IKON made grand promises to provide real family-supporting jobs in order to have someone else pay for these improvements," Nixon said. "It didn't take long for those promises to go south literally. We won't let IKON officials walk away from this mess they created without paying the penalties they are obligated to pay."

The Missouri Department of Economic Development (Mo-DED) approved a $500,000 community development block grant to Jefferson City in 1997 for infrastructure developments in connection with IKON's proposed building site for its remanufacturing and distribution center. IKON contractually agreed to invest $2.5 million in the facility, which was never built.

IKON officials signed a participation agreement in which they agreed to employ 100 additional persons over the next two years, with at least 51 of those jobs to go to people from low and moderate incomes. IKON also agreed to maintain a total of 246 jobs in Jefferson City for a five-year period.

In addition to its failure to meets its obligations under the participation agreement, Nixon said, IKON also defaulted on a state $460,000 new job training program because the jobs were never created. The grant was to provide job training for new IKON employees at State Fair Community College in Sedalia.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

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