Electric vehicle retailer Zap lost ownership of its flagship building in downtown Santa Rosa after reaching a settlement with one of its investors.
The 15-year-old company was sued by investor Al Yousuf Group in Sonoma County Superior Court for failing to pay $5.6 million to the Dubai-based investor, according to the settlement.
Zap agreed to transfer ownership of its headquarter's building on 5th Street to the Al Yousuf Group, repay $1.3 million over the course of a year and relinquish ownership of another property it owns in Mendocino County, according to the settlement finalized on April 16.
Zap's building, located at 501 Fourth Street, is directly across from the downtown Santa Rosa Plaza mall. The company's net loss was $10.7 million in 2009, following a loss of $9.8 million in 2008, according to its annual financial report released this month.
Gary Starr, co-founder of Zap, said in a brief interview Thursday that he did not know if the company would have to relocate its headquarters.
“I haven't been directly involved,” he said. “All I know is (the lawsuit) has been settled.”
He declined further comment.
The Al Yousuf Group is a Dubai-based conglomerate and a major shareholder of Zap, according to Zap's financial statements. Eqbal Al Yousuf, who is president of the Al Yousuf Group, was chairman of Zap at the time of the loan.
The Dubai company agreed to loan Zap up to $10 million in July 2008, with an initial loan payment of $1.76 million.
Zap failed to make its payments, according to the lawsuit. The two sides entered negotiations about repayment last summer, but after that process failed, Al Yousuf sued on September 25.
A call placed to the attorney representing the Al Yousuf Group had not been returned by Thursday afternoon.
Zap has long touted its electric vehicles and over the years has consistently heralded new vehicles it said were under development. Executives have appeared on national television shows and worked with UPS to test Zap vehicles for delivering packages during the Holidays.
Starr and Steve Schneider, Zap's chief executive offer, were the two highest paid employees at publicly traded companies in the North Bay in 2008, according to The North Bay Business Journal. Schneider received $7 million in total compensation and Starr received $3.1 million, according to the publication.
The company spent $8.5 million on general and administrative expenses, and $551,000 on research and development, according to its 2009 annual report.
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