Koll Real Estate Group Sued Over $20.8-Million Tax Liability

Abex Inc. and Wheelabrator Technologies Inc. has sued Koll Real Estate Group of Newport Beach for allegedly failing to contribute $20.8 million to a recent tax settlement with the Internal Revenue Service.

The suit, filed in Delaware Chancery Court, contends that the three companies--all formerly affiliated with Allied-Signal Inc.--had an agreement to jointly settle a federal income tax dispute. Abex and Wheelabrator, both based in Hampton, N.H., contend in the suit, filed late Tuesday, that Koll is making “an eleventh-hour effort to avoid payment.” Wheelabrator is now a subsidiary of WMX Technologies Inc.

The suit says the settlement, which was announced March 24, requires the three companies to pay $72 million to the IRS. Abex agreed to pay $21.5 million and Wheelabrator $29.8 million, the suit says.

The suit asks the court to force Koll Real Estate to make the $20.8-million contribution to which it allegedly agreed.

Koll Real Estate officials weren’t available for comment.

The suit says the tax dispute stems from the early 1980s, when Abex and Wheelabrator were part of Henley Group Inc. Allied-Signal spun off Henley Group in 1986.

Koll Real Estate assumed tax liability in the settlement after it took over management of Signal Landmark Properties, formerly part of Allied-Signal, in 1990, an Abex spokesman said.

The suit describes the tax settlement as a disentangling of tax liabilities.

“At each step along the road to independence, the parties and their predecessors faced the thorny issue of allocating tax liabilities,” the suit says.

Koll Real Estate Group’s principal assets include the Bolsa Chica property in an unincorporated coastal area next to Huntington Beach.

Wheelabrator provides pollution-control services to industrial markets. Abex is a maker of industrial and aerospace products.