Sunrise Banks has sued embattled construction company Thor Cos. and its founder, Richard Copeland, seeking repayment of more than $3 million and a court-appointed receiver to assume control of the company.
Four months after a grand opening of its new $36 million headquarters in north Minneapolis, Thor Cos., the state’s largest minority-owned company, is on the verge of financial collapse, according to the lawsuit filed in Hennepin County District Court.
Sunrise Banks alleges Thor “is generally not paying its debts as they become due, including payroll obligations to its employees and its debts to [Sunrise].” In requesting a general receiver, the bank alleges Thor does not have “sufficient liquidity to continue to operate,” and multiple creditors might attempt a “free-for-all” liquidation of the company.
Copeland, who started Thor 40 years ago, said in an interview Friday that he had been close to lining up new financing this week.
“Sunrise played hardball and didn’t want to negotiate,” Copeland said. “And we were close to a settlement, we thought. They wanted all of their money. We will file a response to the lawsuit. We believe we have claims against the bank.”
Sunrise representatives didn’t immediately respond to a request for comment.
“We’ve struggled in a tough industry with some of the best contractors in the world as our competition,” Copeland said. “We cobbled along for 40 years and never had anything like this happen. We hope to attract new money and are poised with good customers to do well.”
Meanwhile, Thor CEO Ravi Norman has left the company and outside efforts to restructure the business have been abandoned.
“We’ve attempted to negotiate with Sunrise, but that has fallen apart,” Gary Cunningham, chief executive of minority business counselor MEDA, said Friday. “There is now a lawsuit in court. We no longer have a role in negotiating a financial fix to the situation.”
Norman indicated on his LinkedIn account Thursday that he would pursue his “own ventures.”
“Thor Construction has operated in a tough industry, with regional volume, cyclical financial and human capital constraints,” Norman said, in his post. “My transformational vision has been to create new real estate business lines and holdings, while embracing the digital transformation of the built environment and accelerating wealth creation in communities of color. I will lead and pursue those efforts in my own ventures, while offering conscientious moral support to Richard [Copeland] and others as he continues to own and right-size the construction business.”
Norman listed himself as chief executive of Minneapolis-based Norman Global Enterprises, “a full-service utilities management, architectural design, development and strategic management consultancy.”
According to the lawsuit, Thor entered into a credit agreement with Sunrise Banks in October 2009, and was supposed to make monthly payments and pay off the loan by the end of 2018. According to the lawsuit, Thor didn’t make any payments on the loan. The bank said that Thor’s debts are currently greater than its assets.
Earlier this week, Target Corp., which has used Thor as a general contractor to renovate and build stores, said it had paid Thor subcontractors more than $7 million in recent months after they had not been paid by Thor. The payments allowed Target to avoid liens being placed against its properties.
In September, city and local officials were on hand to celebrate the grand opening of Thor’s headquarters, called the Regional Acceleration Center (RAC), at the southeast corner of Plymouth and Penn avenues.
The $36 million, 92,000-square-foot Thor headquarters and small-business incubator is part of a $100 million public-private redevelopment of three corners of the Penn-Plymouth intersection, including Hennepin County’s expanding NorthPoint Health & Wellness Center, a new Estes funeral home and a parking ramp. The RAC also is the new home for MEDA and several small businesses.
Target, a partner in the development, invested about $2 million in a seven-year lease for the fourth floor of the RAC. It has leased portions of its space back to Thor and MEDA and will host a coworking space for its employees and community organizations.
Hennepin County invested about $22 million for a third of the RAC space, for offices for expanding NorthPoint Health, human services and community corrections and 420 spaces in the adjacent 620-stall parking ramp.
Hennepin County said on Friday that the Sunrise Banks lawsuit had no effect on Hennepin County and its ownership of 420 spaces in the parking ramp and occupancy of the fifth floor of the RAC building. On Tuesday, Hennepin County commissioners learned that liens had been placed on the Thor headquarters building.
U.S. Bank invested about $3 million through the purchase of federal tax credits used to subsidize development in economically distressed areas.
Norman said in September that Thor would invest $12 million in the new building, including a mortgage. Norman told the Star Tribune last fall that Thor had revenue of $368 million, but it was unclear in what time frame Thor earned that money. Thor, a private company, told the Star Tribune it generated revenue of about $140 million in 2016.
In 2017, Thor expanded and re-emphasized its services from its roots as a concrete contractor to include development, architectural design as well as consulting. “Our time is now,” Copeland said at the time.
Recently, several employees have left Thor, though it is unclear how many. Thor was supposed to move 50-plus central-office employees into the RAC from its warehouse-building headquarters in Fridley.
Thor, which has worked on big-ticket projects like the Xcel Energy Center in St. Paul and U.S. Bank Stadium in downtown Minneapolis, was also recently selected as part of the development team led by United Properties to orchestrate the massive remake of the Upper Harbor Terminal along the riverfront in north Minneapolis.
“We are currently working with former principals of Thor who remain committed to the project,” said Brandon Champeau, senior vice president of development for United Properties, in a statement. “This is a truly collaborative effort and we have confidence the project team and the community will continue working together to create a new gathering place that will bring multiple benefits to the City and the North Side community.”
United Properties wouldn’t specify which former Thor employees are involved in the project.
Staff writer David Chanen contributed to this report.