Lee’s Legal Troubles Multiply

The week before the Democratic primary went from bad to worse for mayoral candidate Jonathan Lee when news emerged Monday that a fifth supplier, Diversey Inc., is suing his family business, Mississippi Products Inc., for non-payment. The new documents joined revelations just days before that Lee’s company had lost four lawsuits for non-payment and that he has never owned the company, despite running for office as a “small business owner.”

The Diversey complaint, a public document filed in Hinds County Court Dec. 2, 2012, and emailed to the Jackson Free Press by a Harvey Johnson Jr. campaign supporter, was the fifth potential judgment against Mississippi Products Inc. to emerge in a week. The JFP broke the story last Wednesday of what Lee calls around $200,000 worth of debts the businessman’s company owes to various suppliers in several states.

The Diversey suit came to the JFP’s attention the day before Lee reported that his campaign had raised $334,560 since Jan. 1, $183,000 more than the incumbent. Of that total, Lee wrote himself a check for $140,000.

The Lee company has already lost the first four cases, according to the documents, because they did not show up in court or answer the legal filings. Thus, the judges issued “default judgments,” meaning that the company is now on the hook for the payments.

The day after the JFP received the original documents in an unmarked envelope in the mail, Lee was scheduled for an interview with the editorial board. Presented with the documents, Lee said he already knew they had been mailed around, saying that it was an attempt to “impede our momentum.”

“We have an ongoing contractual dispute,” Jonathan Lee said in the interview. “… There’s little I can say.” He attributed the judgments to a disagreement between Mississippi Products, vendors and a former customer who had ordered the products through his company and then decided they didn’t want them. He will not reveal that customer, but a person with knowledge of the situation said the customer is a government agency based in the Jackson area.

Mississippi Products Inc., which enjoys contract advantages for being minority- and veteran-owned, has served a variety of government clients, including federal correction facility, the University of Mississippi Medical Center, the Mississippi State Hospital at Whitfield, and others.

The original court documents showed that Hinds County Judge Melvin Priester had signed three default judgment orders against Mississippi Products Inc. for at least $123,296.71 to three vendors. On June 25, 2012, Priester awarded a judgment for $25,082.55 plus $879.61 in interest to Pitt Plastics Inc.; on Aug. 16, 2012, he awarded $74,518.13 plus $3,756.53 in interest to Georgia Pacific; and on March 14, 2013, he awarded 3M a default judgment of $19,059.79 plus 8 percent interest. In each of the three cases, Priester also awarded the plaintiffs $5,000 in attorney’s fees plus court costs.

On March 14, 2013, Priester signed an “order allowing examination of judgment debtor Mississippi Products Inc.” He granted Georgia Pacific lawyers permission to examine “all books, papers, documents and all other notes of any kind…” and ordered that a subpoena be issued and “served upon the above Judgment Debtor, Mississippi Products Inc., to be served on Jonathan Lee at 2457 Valley St.” to appear on April 4, 2013, to be examined under oath. Lee declined to say whether he appeared in court but said he didn’t ignore it.  The documents also contained a docket page from LaPorte (Ind.) Circuit Court showing that Filter Specialists Inc. filed a claim against Mississippi Products Inc. on Dec. 14, 2011, with a default judgment for $20,700 entered against the company on Jan. 17, 2012.

The fifth lawsuit, revealed earlier this week, indicates that Mississippi Products Inc. owes Diversey Inc., a provider of commercial cleaning, sanitation and hygiene based in Wisconsin, $23,923.75 for products the company purchased on credit in October 2011, when Lee was running the company as president.

Lee attributed the default judgments to the fact that his family business is a “middleman” between the vendors and a contractor that Mississippi Products Inc. supplies. The Lee business resells disposable products to medical, janitorial, administrative, industrial and filtration companies, and provides warehouse space, its website states.

Lee insisted that the default judgments resulted from a typical “business dispute” and are all still “in negotiations,” despite the language in the court documents indicating otherwise. “We’re in negotiation to handle this matter with all the vendors. … We don’t think we’re wrong.” He would not, however, provide the name of the company’s attorney or provide more information confirming that negotiations are in process.

The candidate strongly emphasized that he was no longer president of the company when the judgments were rendered–saying that he stepped down from that position effective Dec. 31, 2011, and that current secretary of state documents would prove it.

But they didn’t. The 2012 corporate annual report, dated Oct. 8, 2012, for Mississippi Products Inc., lists Jonathan J. Lee as president and Jean Lee (his mother) as vice president–with his mother’s name on the signature line. Lee resigned as the company’s “registered agent” on Dec. 21, 2011, a week after the Indiana company sued. A “registered agent” is not necessarily the same as a company executive; often the “agent” is the attorney or corporate officer who handles corporate paperwork.

On Oct. 25, 2012, R. Jean Lee, (Lee’s mother) filed to become the registered agent, nearly a year after her son removed his name as agent, yet the secretary of state does not list her as president.

Lee emphasized to the JFP editorial board that he has never been an owner of Mississippi Products Inc., even though he told the Jackson Free Press in June 2012 that he was a ” a small business owner, (and) a black business owner.” He said he has not worked for the company since he resigned as president in late 2011 because “this is a full-time thing, running for mayor.”

When asked why he did not reveal the legal dispute with the business sooner, Lee said it is “not germane” to his campaign for mayor, also saying that he did not believe that a story about it is “fair.” He also said that he did not alert donors and supporters about it in advance of the documents being distributed this week.

Candidate Lee, a Northwest Rankin and Mississippi State graduate who was chosen as chairman of the Jackson Chamber of Commerce about a year after he moved into Jackson in 2008, has long touted his experience running Mississippi Products Inc. as a primary reason to elect him mayor of Jackson. On his campaign website, Lee said he took over the family business after his father, John Lee, died; he was 24 when he took the helm. “Jonathan not only became the head of his family–but also the head of his father’s business,” his campaign site states.

See jfp.ms/jonathanlee for documents.