Tower tangle: Judge limits Minor suit against Danielson
The tussle over the unfinished Landmark Hotel entered a new chapter Wednesday, as lawyers for developer Lee Danielson and owner Halsey Minor sparred before Judge Edward Hogshire, who ended up pushing some of the battle into arbitration.
"It won't obviate what's left of the suit completely," said the judge, "but a lot of these issues will be resolved with arbitration."
The last time these two titans clashed was late November when Judge Hogshire threw out Minor's fraud claims–- but also let Minor refile the suit. And refile he did, making the same basic allegations that Danielson intentionally "sabotaged" the project to force Minor out.
In court on February 17, Judge Hogshire heard Danielson's attorney Connor Crook slam the December 11 refiling as an attempt to evade the judge's last ruling in which Danielson, who is also suing Minor, was treated not as an individual but as the head of a company called Hotel Charlottesville LLC.
"Since the court has already thrown out these allegations against Hotel Charlottesville," said Crook, "plaintiffs say, 'Now we're gonna blame Lee Danielson.'"
Indeed they did. Minor's lawyer Betty Shumener, who flew in from Los Angeles, where both men live, told the court that Danielson was the sole decision-maker in the company and that the 101-room hotel was erected on an over-optimistic budget that amounted to fraud against her client.
"He wanted to get this hotel built," Shumener told the judge. "He was looking for a deep pocket."
In recent months, the depths of Minor's pockets–- which once held a fortune estimated at approximately $355 million thanks to visionary investments in GoogleVoice and Salesforce.com, plus the founding of Cnet–- have come into question.
Two creditor lawsuits allege that shopping sprees on art have led Minor–- who has also found himelf dealing with divorce, racehorses, and multiple mansions–- into financial ruin. However, Minor disputes such allegations; and he vows, even while successfully fighting off two foreclosure actions on his 205-acre Fox Ridge Farm, that he'll bring down the company that caused his liquidity crisis.
"I am tireless in pursuit of my dreams," Minor says in an email. "I may actually own Merrill Lynch when this one is done."
Merrill Lynch was once an icon of Wall Street and a place where a young Minor once worked, but the financial firm became the bane of Minor's existence in late 2008 when it suddenly slapped a billion-dollar freeze on his accounts. Minor alleges that Merrill's freeze was part of a pattern of illegality that arose from prettying its books in anticipation of its merger with Bank of America.
Indeed, Bank of America agreed February 2 to pay the Securities and Exchange Commission $150 million to settle federal charges that it hid the depths Merrill's financial losses from shareholders; two days later, New York Attorney General Andrew Cuomo filed new claims against the company that accepted billions in bailout money from American taxpayers. (Minor, however, recently lost Merrill's $21.6 million suit against him, saw his counterclaim thrown out as made in "bad faith," and agreed one month ago to abandon his appeal.)
Back at the Charlottesville Circuit Courthouse, an attorney from McGuire Woods told the judge that there are 15 liens from unpaid contractors eager to see the lawsuits resolved. Also present was an Atlanta lawyer representing the project's lender, Specialty finance Group, which Minor sees as a co-conspirator with Danielson. The lender, waging a separate default claim against Minor in Georgia, denies the allegation.
After the hearing, Danielson, who helped reinvigorate downtown in the mid-1990s by developing the Charlottesville Ice Park and Regal Downtown theater, expressed relief that key issues in the case were moving toward arbitration, something his side has sought from the start.
"There is no dispute," Danielson said in the court hallway. "He owes me the money."
Minor, who was not present, seemed to take equal pleasure in the judge's decision to move the case forward.
"Glad it will go fast," he said in an afternoon email.
The two sides were given just two weeks to choose a mutually agreeable arbitrator.