The Need to Know

Just heard on BBC Radio Jersey that the Waterfront developers Harcourt say they did know about the lawsuit in Las Vegas, but only after sending reassurances to the Chief Minister on 22 May 2008. Before that they knew it was pending, but that was all.

Questions to be considered.

As the lawsuit was filed on the 30 April, they must have an extremely slow method of communication - passenger pigeon or packet-express steam boat perhaps?

But even so, why they say they didn't tell the Chief Minister - and remember he asked them again just before the debate? They say now that it was not relevant to the financing of their Jersey operations, and after all they have 100 or so projects on the go.

As a recent news report (see below) mentions "unlike European countries, punitive damages can be assessed should the lawsuit be won".

And they didn't think it relevant to mention that?

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http://www.lvrealty.net/news

Luck of the Irish: Sullivan Square developer files suit

Another high rise condo project has stalled, this time its the green project Sullivan Square. As with other projects, lack of funding is behind the project's collapse. However, unlike other projects, interest in owning a piece of it were high and the developer had enough funds contractually to complete the mixed use project.

Locally based Glen, Smith & Glen Development is now suing its equity partner in the deal, Harcourt Developments, a private company from Dublin, Ireland, which had agreed to finance up to $800 million for the Sullivan Square project. The lawsuit alleges breach of contract and breach of fiduciary responsibility by Harcourt Nevada for failure and refusal to fulfill its funding responsibilities according to the contract.

According to the contract filed with the lawsuit, Harcourt Nevada and its principal, Patrick Doherty, received a 60% interest in Sullivan Square in return for providing all funds for the development and construction. Oversight of the development and construction was the responsibility of Glen, Smith Glen, who also owned the land and had obtained the entitlements.
Glen, Smith Glen has charged in the suit that Harcourt never provided the necessary funds despite repeated attempts to collect them. It also alleges that Harcourt was trying to force out the Plaintiffs so that they could assume control of the project. Harcourt repeatedly stated that funding was imminent and their principal personally met with them in February of this year.

Unlike European countries, punitive damages can be assessed should the lawsuit be won. In Irish courts the worst that happens is you pay what you owe (seems like there is no consequences for bad behavior). It makes you wonder if Harcourt is just gambling a little to see if they could bankrupt Glen, Smith & Glen and take over the project, thinking that there is minimal risk. They might be in for a big shock after the trial.

So Sullivan Square is now officially in limbo. I'm pretty sure the project will go forward, but as to who will be officially developing it is anyone's guess at this time. One thing is for certain, because of the amount of money involved it is going to be at least a year or two before anything is settled. As to the impact this will have on the Las Vegas high rise condos market, it will probably be minimal.



http://www.industrialnewsupdate.com/archives/2008/01/index.php