Case 3:22-cv-00624-DPJ-FKB Document 1 Filed 10/24/22 Page 1 of 11

IN THE UNITED STATES DISTRICT COURT FOR

THE SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION

JACKSON REDEVELOPMENT AUTHORITY PLAINTIFF

VS. 3:22-cv-624-DPJ-FKB
CIVIL ACTION NO. ______________________

FLIX NORTH
AMERICA INC. and
GREYHOUND LINES, INC. DEFENDANTS

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COMPLAINT

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Jackson Redevelopment Authority files this Complaint against Greyhound

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Lines, Inc. and Flix North America Inc., and states as follows:
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Parties
1. Jackson Redevelopment Authority (“JRA”) is the urban renewal agency
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for the City of Jackson, chartered under Mississippi law pursuant to Miss. Code Ann.
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§ 43-35-33.
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2. Flix North America Inc. (“Flix”) is a Delaware Corporation with its

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principal place of business in Dallas, Texas. Flix may be served through its registered
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agent of process, A Registered Agent, Inc., 8 The Green, STE A, Dover, DE, 19901.

3. Greyhound Lines, Inc. (“Greyhound”) is a Delaware Corporation with its

principal place of business in Dallas, Texas. Greyhound may be served through its

registered agent for process CT Corporation, 645 Lakeland East Dr., STE 101,

Flowood, MS, 39232.

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Jurisdiction

4. The Court has jurisdiction over this matter pursuant to 28 U.S.C.

§1332, in that complete diversity of citizenship exists between JRA as Plaintiff, and

Greyhound and Flix as Defendants.

5. Venue is proper pursuant to 28 U.S.C. § 1391(b)(2) in that a substantial

part of the events or omissions giving rise to the claim occurred in Jackson,

Mississippi, in this district and division.

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Facts

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a. The Lease Agreement for Space at Union Station

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6. JRA is the owner and lessor of property commonly known as the Union
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Station Multimodal Transportation Center (“Union Station”), located at 300 West
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Capitol Street, Jackson, Hinds County, Mississippi 39202.
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7. Greyhound entered into a ten-year lease for interior and exterior space
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at Union Station, with a commencement date of August 1, 2003. The leased premises
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were to be used by Greyhound for operation of an inter-city bus terminal and the
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handling of passengers, baggage and package express, with other uses incidental
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thereto. A copy of the lease is attached as Exhibit “1.”

8. In addition to other provisions, the lease required Greyhound to pay rent

of $50,000 per year for the first five years of the lease term, and $75,000 per year for

years five through ten.

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9. Once the initial ten year term expires, the lease further requires

Greyhound to pay rent of 150% of the rent previously due during the final five years

of the lease term, as holdover rent.

b. Greyhound’s Lease Default

10. For a period of time, Greyhound has withheld rent from JRA, claiming

a right of offset pursuant to the lease.

11. JRA, in an effort to investigate Greyhound’s contentions, repeatedly

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asked Greyhound for documentation to support its offset claim.

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12. Despite JRA’s repeated requests for documentation, payment records,

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and/or other information to support the asserted right to offset, Greyhound, for years,
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failed to provide responsive documentation, while continuing to refuse to pay monthly
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rent as required by the lease.
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13. Due to Greyhound’s continued intransigence with respect to both its

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payment obligations and its refusal to provide documentation supporting its alleged
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right to offset rental payments, JRA engaged Jones Walker to send a letter to
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Greyhound dated March 4, 2020, informing Greyhound of a total debt owed in the
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amount of $815,625.00, plus late fees and interest.

14. The March 4, 2020 letter also specifically terminated Greyhound’s

tenancy and right to remain in Union Station, effective thirty (30) days from the date

of the letter. A true and correct copy of the March 4, 2020 termination letter is

attached hereto as Exhibit “2” and incorporated by reference.

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15. Following transmittal of the March 4, 2020 termination letter, JRA and

Greyhound negotiated terms of continued occupancy and use of the Union Station

facility by Greyhound, without waiver of JRA’s claim for past due and holdover rent.

16. Greyhound subsequently paid under protest $189,000.00 of the

$815,625.00 it owed in past due and holdover rent. JRA accepted this partial

payment without waiver of its claim for the remainder of past due and holdover rent.

c. Partial Payment by Greyhound, and Subsequent

Negotiations

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17. Anticipating that Greyhound would pay the remaining past due rents,

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or at least justify its failure to pay those rents, JRA agreed to allow Greyhound to

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continue to operate out of the Union Station facility.
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18. Since the time of the payment by Greyhound of the undisputed amount
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owed, JRA has continued to demand full payment of past due and holdover rent.

19. In response, Greyhound has continued to assert that it is entitled to

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offset for various expenses allegedly incurred by it in connection with its occupancy
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of the facility.
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20. Despite repeated requests by JRA going back several years for proof of

such expenses, Greyhound failed and refused to provide documentation supporting

its claim of offset, until October 10, 2022, when it furnished JRA with alleged receipts

and other documentation putatively supporting its contentions regarding expenses

incurred and a right to offset.

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21. The documentation provided by Greyhound is incomplete and

insufficient to support Greyhound’s claimed right of offset, and ultimately confirms

that at least a significant portion of unpaid rent is undisputedly owed.

22. Despite this fact, Greyhound has not made any additional payments to

JRA.

23. Consequently, due to Greyhound’s continued refusal to honor its past

due rental obligations, and failure to address the delinquencies in a satisfactory

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manner, JRA elected to fully and finally terminate Greyhound’s occupancy at Union

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Station.

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d. Second Termination of Tenancy and Recent Actions Taken
by Greyhound la
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24. By and through counsel, JRA sent a Notice of Termination dated August
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25, 2022 to both counsel for Greyhound and to Greyhound’s corporate office in Dallas,

Texas, advising that Greyhound had thirty (30) days to vacate the premises. A true
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and correct copy of the August 25, 2022 Notice of Termination is attached hereto as
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Exhibit “3” and incorporated herein by reference.

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25. Before it received JRA’s Notice of Termination, Greyhound secretly

made arrangements to leave Union Station, and moved its operations to a Love’s

Truck Stop in Flowood, Mississippi, in conjunction with a 30-day Notice of

Termination letter dated August 22, 2022, sent by Greyhound to JRA, and to an

outdated address for counsel for JRA. A true and correct copy of this letter from

Greyhound to JRA is attached hereto as Exhibit “4” and incorporated herein by

reference.

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26. JRA did not receive the August 22, 2022 letter from Greyhound until

after it had transmitted its own Notice of Termination on August 25, 2022.

27. After attempting to move its operations to the Love’s Truck Center in

Flowood, Greyhound received a “cease and desist” letter from the City of Flowood,

demanding that it shut down its operations at that site due to unsuitability and lack

of proper zoning for operation of a bus terminal.

28. Greyhound complied with Flowood’s demands and halted operations

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there. It then resumed operations at Union Station.

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29. Subsequent to Greyhound’s resumption of operations at Union Station,

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JRA (by and through counsel) transmitted an additional letter dated September 1,
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2022 to counsel for Greyhound acknowledging receipt of its Notice of Termination
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dated August 22, 2022 and advising Greyhound of the continued debt owed in the
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amount of $617,250.00. A true and correct copy of the September 1, 2022 letter is
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attached hereto as Exhibit “5” and incorporated herein by reference.

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30. During additional calls and in further written communication, counsel

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for JRA has unequivocally informed Greyhound that it must pay the past due rents
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owed, but offered Greyhound additional time to pay that amount in full.

31. Greyhound continued to operate at Union Station after the deadline

given by JRA for compliance with the Notice of Termination, but it has since ceased

operations there.

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e. Greyhound’s Obligation to Remove Fuel Tank

32. In addition to its provisions regarding the leasing of interior premises

at Union Station, the lease provides exterior demised premises at Union Station, and

permitted installation of an underground storage tank by Greyhound to use in

supplying fuel for its buses.

33. Since the inception of the lease, Greyhound has maintained and

operated an underground fuel storage tank and related above-ground equipment for

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supplying its buses at Union Station.

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34. Section 4.1.5 of the lease provides that upon termination Greyhound

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will, at JRA’s option, either close that fuel tank in place or remove it.

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To date, Greyhound has not contacted JRA regarding the fuel tank, and
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has taken no action to either close or remove it.
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36. The continued presence of the fuel tank creates actual and/or potential
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problems for JRA, including the presence of a safety hazard, and the likelihood of
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creation and/or exacerbation of contaminants and similar environmental hazards

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that will violate regulations promulgated by the Mississippi Department of

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Environmental Quality or other laws.

37. Due to the likely safety and environmental hazards posed by the

continued presence of the fuel tank, and Greyhound’s failure to adhere to the lease

requirement mandating that it close or remove the fuel tank, JRA will be required to

take remedial action at its own cost.

38. The costs to close or remove the fuel tank will likely be substantial.

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39. Such costs are and will be recoverable against Greyhound, due to its

obligation to close or remove the tank, as set forth in the lease.

Count I: Breach of Contract

40. JRA adopts and re-alleges all previous paragraphs of this Complaint, as

if fully set forth herein.

41. JRA and Greyhound are parties to the lease, which is enforceable by its

terms.

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42. The lease creates an obligation on the part of Greyhound to pay rent to

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JRA, in amounts set forth in the lease.

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43. Greyhound has failed and/or refused to pay amounts of holdover rent
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owed to JRA under the clear and explicit terms of the lease.
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44. Greyhound has therefore breached its contractual obligations owed
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under the lease.

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45. Due to this breach of its contractual obligations, Greyhound owes JRA
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no less than $617,250.00 in past due holdover rent, plus interest, attorneys’ fees, and
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court costs, plus all costs of removing the underground fuel storage tank in
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compliance with applicable federal, state and local laws and regulations.

46. JRA therefore demands judgment against Greyhound for no less than

$617,250.00 in past due holdover rent, plus interest, attorneys’ fees, and court costs.

Count II: Successor Liability as to Flix

47. JRA adopts and re-alleges all previous paragraphs of this Complaint, as

if fully set forth herein.

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48. Effective October 1, 2021, Neptune Holding, Inc. (“Neptune”) acquired

Greyhound. Neptune provided notice of its acquisition of Greyhound Lines, Inc. in a

letter to JRA dated November 10, 2021. A copy of this letter is attached as Exhibit

“6.”

49. As a result of its acquisition of Greyhound, Neptune assumed

responsibility for paying the past due holdover rent owed by Greyhound to JRA.

50. On August 10, 2022, Neptune merged with Flix.

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51. Flix is therefore jointly and severally liable with Greyhound for no less

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than $617,250.00 in past due holdover rent, plus interest, attorneys’ fees, and court

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costs, and all costs of removing the underground fuel storage tank in compliance with
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applicable federal, state and local laws and regulations.
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52. Flix assumed that liability when it merged with Neptune.
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53. JRA therefore demands judgment against Flix for no less than
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$617,250.00 in past due holdover rent, plus interest, attorneys’ fees, and court costs,
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in addition to all costs of removing the underground fuel storage tank in compliance
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with applicable federal, state and local laws and regulations.

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Count III: Attorneys’ Fees

54. JRA adopts and re-alleges all previous paragraphs of this Complaint, as

if fully set forth herein.

55. The lease provides that in the event JRA is forced to sue Greyhound to

enforce the terms of the lease, Greyhound shall be liable for attorneys’ fees incurred

by JRA, plus all costs of court.

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56. JRA therefore demands judgment against Greyhound and Flix for all

attorneys’ fees and court costs incurred by it in connection with all measures

undertaken to enforce the terms of the lease, in an amount to be determined by the

Court, in accordance with Mississippi law.

WHEREFORE, PREMISES CONSIDERED, Jackson Redevelopment

Authority respectfully requests and demands judgment against the Defendants, as

follows:

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a. under Count I, judgment against Greyhound Lines, Inc. in the amount

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of $617,250.00 in past due holdover rent, plus the cost of removing the fuel tanks,

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plus prejudgment and post judgment interest, attorneys’ fees, and court costs;

b.
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under Count II, judgment against Flix North America, Inc., jointly and
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severally with Greyhound, in the amount of $617,250.00 in past due holdover rent,
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plus the cost of removing the fuel tanks, plus prejudgment and post judgment
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interest, attorneys’ fees, and court costs, as a result of the acquisition of Greyhound
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and assumption of its liabilities;

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c. under Count III, to the extent not previously or adequately set forth or
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requested, a judgment against Greyhound and Flix for all attorneys’ fees and court

costs incurred by JRA in its efforts to enforce the lease, dating back to 2020.

JRA further requests all other relief appropriate in the premises and to which

it is otherwise entitled.

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Dated, this the 24th day of October, 2022.

Respectfully submitted,
JACKSON REDEVELOPMENT
AUTHORITY
By Its Attorneys,
JONES WALKER LLP

By: /s/ Adam Stone

ADAM STONE

Adam Stone, MSB #10412

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Chad J. Hammons, MSB #10419
Kaytie Pickett, MSB #103202

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JONES WALKER LLP
190 East Capitol Street, Suite 800 (39201)

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Post Office Box 427
Jackson, Mississippi 39205-0427
Telephone (601) 949-4717
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Telecopy (601) 949-4804
E-mail astone@joneswalker.com
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chammons@joneswalker.com
kpickett@joneswalker.com
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STIMLEY BROWN LAW FIRM, PLLC

General Counsel, Jackson Redevelopment Authority
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Attn: Pernila Stimley Brown, MSB# 4668

P.O. Box 24613
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Jackson, MS 39225-4613
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T: 601.383.8954
E: pbrown@stimleylaw.com

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