The owners of the Island Theatre are suing an Island businessman for allegedly backing out of an agreement to purchase the historic Circuit avenue building three years ago.

On July 29, Lucky 7 Realty Trust and trustee Brian Hall filed a lawsuit against Jefrey DuBard in Dukes County Superior Court, claiming Mr. DuBard breached a 2023 contract to purchase the Island Theatre for more than $2.7 million. Brian Hall’s brother and Island Theatre co-owner Ben Hall Jr., is his attorney in the case.

The theatre has sat empty for more than a decade and is now being eyed by the town for a potential eminent domain taking. Mr. DuBard, who has a background in real estate development, denied the claims in a statement to the Gazette Monday.

“I strongly dispute the characterization of those discussions in the complaint,” he wrote in a statement to the Gazette.

According to the lawsuit, Mr. DuBard first made an offer on the Island Theatre in July of 2023. The suit alleges that Mr. DuBard outbid another interested party and that the Halls accepted Mr. DuBard’s offer on July 31, 2023.

The suit claims that Mr. DuBard then failed to make payments for several weeks before stating he could not pay.

“Eventually, DuBard indicated he could not pay, admitting he had acted fraudulently,” the lawsuit reads.

When reached this week, Mr. DuBard confirmed that he “explored the possibility of purchasing” the Island Theatre three years ago, but he denied that he acted fraudulently or was engaged in any sort of binding contract with Mr. Hall.

“In fact, Mr. Hall’s own contemporaneous communications from 2023 directly contradict key allegations now being made about whether there was a binding, completed agreement,” he wrote.

The suit goes on to accuse Mr. DuBard of knowingly interfering with a potential deal between the Halls and the prospective buyer Mr. DuBard outbid.

“DuBard is a sophisticated highly trained real estate dealer and knew what he was doing was interfering in the prospective agreement the Trust might have made with the other offeror,” the lawsuit reads.

According to Mr. DuBard, Mr. Hall said other prospective buyers were still in the mix a few weeks after Mr. DuBard initially inquired about the property, and that the family was thinking of raising the asking price.

“I also categorically deny any allegation that I acted fraudulently or intentionally interfered with another prospective purchaser,” Mr. DuBard wrote.

The Halls are seeking $2.75 million in damages from Mr. DuBard, plus interest.

Ben Hall Jr. declined to comment on the case.

The suit comes five months after Oak Bluffs voters authorized the town to explore purchasing the historic theatre or taking it by eminent domain. The building has been vacant at the start of Circuit avenue since 2012 and has fallen into significant disrepair.

Oak Bluffs officials have convened a working group to decide what to do with the Island Theatre if the town were to acquire it. The Halls have said they would like to sell the building privately but have struggled to do so, in part citing insufficient access to town wastewater.

The Halls faced a similar situation in 2017, when Edgartown took the family’s Main street building, known colloquially as the Yellow House, by eminent domain after it fell into disrepair. Ben Hall Jr. unsuccessfully tried to block the eminent domain proceeding.

In 2021, attorney Benjamin L. Hall brought a suit against the town in Massachusetts Land Court, claiming the town violated setback requirements in its zoning regulations and failed to go through the Martha’s Vineyard Commission before renovating the Yellow House property. The suit was dismissed.

Mr. Dubard acknowledged the public attention the Island Theatre has received this year, and he hopes for a positive outcome for the building and the town.

“I wish the Halls well, and most importantly, I hope the Island Theatre ultimately has a positive future for Oak Bluffs and the Island,” he wrote.