Halsey Minor is misunderstood... Everything you've heard is wrong
He has just lost another lawsuit–- this time a $21.6 million judgment for Merrill Lynch–- but Halsey Minor vows that legal setbacks won't deter his quest to complete the Landmark Hotel, an incomplete eyesore that holds the promise of topping the Omni as the most luxurious lodging on the Downtown Mall.
In a recent series of telephone interviews, the man who founded internet giant CNet and whose riches soared to $355 million around the turn of the century alleges that everything the public has been told about him in recent days is wrong.
Minor says he's not to blame for the Landmark mess, he's not broke, and he's not going to let go of the hotel without a fight–- even if it means millions in legal bills.
"I'm going to finish that damn hotel," says Minor, "because I started it."
That doesn't mean Minor thinks the hotel deal was a good one. In fact, he now concedes that he should have steered clear of Lee Danielson, the developer whose 1990s ice park and cinema touched off a downtown renaissance but who wound up in such internecine warfare that Minor says he should have known better.
"I stupidly wanted to help Lee rehabilitate his reputation," says Minor, who's fighting his former employee and bank with litigation in both Charlottesville and Fulton County, Georgia.
In a new filing in his counterclaim against Danielson and the hotel's Atlanta-based lender, Specialty Finance Group, or SFG, which is suing him for default, Minor lashes back with information he gleaned from the defendants' own emails and other documents.
Minor's filing, a Motion for Summary Judgment, alleges that he was presented a "sham construction budget" that understated the hotel's cost by $4 million. Only after he countersued, Minor says, did he obtain documents that paint the true picture of what happened.
"This was a no-lose deal for SFG," Minor alleges in the Motion. "SFG assumed that given [my] net worth, [I] would simply issue a blank check to cover any shortfall and turn a blind eye to SFG’s shenanigans. SFG was mistaken."
Minor's filing alleges that Danielson and SFG colluded to create bogus defaults in an effort to bankrupt the project and oust Minor. But what could possibly motivate a bank to behave that way? The answer, says Minor, is simple: fees.
"These guys," he says, "are the exact version of the churn-and-burn firms in California that made all the fees while the homeowners went broke. It's one of the greatest examples of lender abuse that people have ever seen."
If that's the bank's M.O., it may need some refining, as SFG and its parent company, Silverton Bank, made so many bad loans they got taken over by the FDIC in July.
Contacted for comment, Danielson says he has a single word for Minor's theory: "fantasy."
But it's all stark reality to Minor, who contends that after he fired Danielson late last year, the developer fired off harmful emails, such as this one to SFG on January 23:
"I also have a business plan that I believe may work to move Halsey out and protect the property so we can go forward and finish the project."
Danielson isn't the only one whose emails have captured Minor's attention.
"Check out the blog comments from the locals," wrote one SFG official to a colleague. "Too funny! They ridicule Halsey!”
According to the Motion, another SFG official wrote, “Here is some fun reading. It’s a long article on Halsey, plus a lot of blogging, including some rebuttals from him. I’m actually starting to feel sorry for the guy now.”
Minor's motion concludes, "The animus and collusion between SFG and the Developer against [me] were palpable."
And the alleged conspiracy didn't end in Atlanta. Minor says in an interview that various creditor lawsuits against him–- totaling nearly $60 million and portraying him as unable to pay his bills–- were based on a sort of mob mentality.
"It was a chain-reaction," says an angry Minor, explaining that when one creditor panics, the rest follow suit. Literally. He's been sued by Sotheby's and Christie's auction houses for non-payment of art he bought at auction, and that's another thing that angers him.
"I don't owe Sotheby's or Christie's anything," fumes Minor. "They have the art. I never touched that art. They're suing me as if I burned it."
According to Minor's filing–- sworn and submitted under penalty of contempt if its facts aren't true–- his finances are strong, with a 2007 net worth of $119,596,700.
"I'm anything but broke," says Minor. "My net worth is double in two years what it was before."
So why doesn't he just pay back the money he borrowed from Merrill Lynch?
Principle. Minor says he refuses to return the $21.6 million because of his outrage that Merrill slapped a secret billion-dollar hold on his account late last year when Merrill was cleaning up its books to prepare for its takeover by Bank of America. Minor didn't discover the freeze until he tried to send $700,000 in wire transfers, and they bounced–- even though Minor had $2.1 million in his account.
Merrill also harmed him with subpoenas to Christie’s and Sotheby's "falsely informing the recipients that the entire collection of Mr. Minor's personal art was subject to lien," according to his counterclaim against Merrill. "Mr. Minor's reputation as an honest and solvent businessman suffered."
Unfortunately for Minor, federal judge Sidney H. Stein, before granting Merrill's victory October 23 via summary judgment, described an attempted amendment to Minor's counterclaim as "futile, made in bad faith, and dilatory."
Dilatory means designed-to-delay, but no worry, as Minor has already filed notice that he'll appeal the loss, a move which he concedes might put the matter "on ice" for up to four years. But Minor asserts that his overriding goal is preventing Merrill from committing such "abusive debt-collection practices" with other customers.
To emphasize the seriousness of his outrage, he filed another suit against Merrill, this time in California, the home of Minor and a consumer-friendly legal code. Minor is not afraid to wage uphill courtroom battles.
In March, a federal judge dismissed his class-action suit against Sotheby's. More recently, an effort to force the Florida city of Hialeah to void the 2004 sale of its historic horse-racing track (to an owner who let racing cease) met a similar fate. Even fighting for a hotel in Charlottesville appears to have outstripped dollars and cents.
"I don't give a sh*t how much I get back," says Minor, noting that his legal bill in the Danielson-SFG actions recently hit $1.8 million. "They'll pay for it. They'll lose because what they did was wrong."
Neither SFG's nor Merrill Lynch's lawyer would speak to a reporter, but Minor's did. Attorney Lee Weiss confirms that Minor will appeal the federal court loss to Merrill, though he concedes that there's currently nothing stopping Merrill from commencing collection activities against his client.
As for the empty hulk of a hotel towering 10 stories above the Downtown Mall, it appears to be under government control while at least three lawsuits swirl over it. But that isn't deterring Minor from renewing his vow to finish.
"I'm going to," he says, "but the FDIC owns the bank, and they won't even return my phone call."
–updated 3:04pm, Thursday, November 12 with new headline
–original headline: "Merrill loss: But Halsey Minor vows to fight on"