Wednesday, August 8, 2012

Investor Solicited To Help Restructure $500M In Sour Loans Buys Defaulted Debt Instead, Snatches Project Out From Under Hapless Developer By F'closure

In Las Vegas, Nevada, the Las Vegas Review Journal reports:

  • The developer of the Town Square shopping and office complex south of the Strip has sued the Connecticut investment fund that foreclosed on it last year, seeking more than $300 million in damages.

    According to the complaint filed in Clark County District Court late Wednesday, Miami-based developers Jeffrey and Jacquelyn Soffer and their company, Turnberry Capital, spent more than two years trying to restructure nearly $500 million in loans. The effort included bringing in Five Mile Capital Partners of Stamford, Conn., as a potential co-owner.

    However, the court papers contend that Five Mile covertly switched from partner to adversary, buying enough of the loans then in default to force a foreclosure and squeeze out the Soffers. Soffers' lawyers contended that this amounted to "stealing" the 1.2-million-square-foot project, noted for its mix of shopping, entertainment and offices set retro architectural style.

    "(Five Mile's) conduct was so egregious and vulture-like that it should be punished and made an example of," wrote Soffer attorney Daniel McNutt.

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