Donahue faces $1.1 million foreclosure
Staff writer
Financial services company Osage Capital filed suit Feb. 24 to foreclose mortgages on property owned by closed Durham trailer maker Donahue Manufacturing, affiliated company LKBAR, and Doug and Amy Kjellin.
Osage seeks $1,112,180.17 plus costs and interest and to foreclose mortgages on land, buildings, and equipment. It seeks that the land and equipment be sold at a sheriff’s sale.
The suit seeks a one-fifth share of real estate owned by the Kjellins because the couple used the real estate as surety for loans through Tampa State Bank.
“The Kjellins co-own that property with other parties,” Wichita lawyer Cody Branham said. “Osage Capital only has a mortgage on the one-fifth owned by the Kjellins.”
After a series of loans and modifications, the bank transferred the note Oct. 3 to Osage.
The Kjellins were dismissed from the case the day after it was filed because they filed Chapter 7 (dissolution) bankruptcy Feb. 21, Branham said.
“I was not yet aware when I filed my petition on Feb. 24 that they had done so,” Branham said. “Because I filed my petition after they filed for bankruptcy, the automatic stay applies, and I cannot pursue Doug and Amy Kjellin unless and until the automatic stay is lifted by the bankruptcy court. That is why they were dismissed without prejudice.”
Donahue Manufacturing, started in 1962 by James Donahue, closed Jan. 10 after what Doug Kjellin said was reduced demand for trailers.
Kjellin said at that time that Donahue had not filed for bankruptcy but did not plan to reopen.
Donahue made implement carriers, stock trailers, grain trailers, flatbed trailers, expandable trailers, hydraulic trailers, slide-tilt flatbed trailers, detachable flatbed trailers, swather carriers, and contractors’ trailers.
The trailers were sold throughout the western half of the nation, but no Kansas dealerships were listed on Donahue’s website.