- Associated Press - Wednesday, February 4, 2015

KANSAS CITY, Mo. (AP) - Joplin has ended its contract with a Texas-based contractor leading tornado recovery efforts after the firm mysteriously closed up shop without notifying the city last week as its co-founders resigned.

The southwest Missouri community announced Wednesday it had severed ties with Wallace Bajjali Development Partners a day earlier in a letter. The city cited “gross negligence, fraud, and willful misconduct.” City attorney Peter Edwards declined to discuss the fraud claim, saying in an email that the city doesn’t comment on pending or potential litigation.

The city learned third-hand last month that Wallace Bajjali’s office had closed and later was notified in an email that the co-founders - president Costa Bajjali and CEO David Wallace - had resigned. Wallace doesn’t have a working home number, and a phone message left at Bajjali’s home wasn’t immediately returned.

The Sugar Land, Texas, firm was hired in 2012 after presenting a plan for $800 million in projects to help Joplin rebuild from a 2011 tornado that destroyed a large swath of the city and killed 161 residents. The city said it had paid Wallace Bajjali nearly $1.7 million, although no projects were completed. The payments included $1 million that was a 50 percent match for at least $2 million worth of staff time, office expenses and other costs the firm incurred working on projects.

The letter also mentioned Wallace Bajjali’s other legal and financial troubles, including $1.5 million owed to investors in a failed Houston-based business radio station company.

Amarillo, Texas, announced last week that it was cutting development ties with Wallace Bajjali, and the firm’s project in Waco, Texas, filed for bankruptcy in 2011, claiming debts of more than $9 million.

Despite the problems in Joplin, City Manager Sam Anselm said he was hopeful about the city’s future, noting that Wallace Bajjali had helped assemble 35 acres that can be developed.

“We have demonstrated our resolve and resiliency to the world once before,” he said in a statement Wednesday, “and I hope we can show our true character again as we proceed with the next phase of our recovery.”

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