Free at last? Govt-owned bank wins control of Landmark hotel

Minor and Danielson at the 2008 groundbreaking. FILE PHOTO BY JAY KUHLMANN

Three years after ground was broken and two years after lawsuits began flying, the towering skeleton of the planned Landmark hotel crept one inch closer to completion Wednesday, January 19, when a Georgia judge ruled against Halsey Minor on all counts in litigation between him and his lender.

"It was game, set, and match in favor of the bank," says Connor Crook, attorney for another party in the morass, a company controlled by Lee Danielson, developer of the 101-room luxury lodging. "All claims are now resolved between those parties, pending any appeal."

Appeal indeed, says Halsey Minor, a tech industry titan with a knack for waging litigation long after the first gavel has fallen.

"The decision was a travesty of justice," Minor says in an email, "and will be reversed."

The bank–- Atlanta-based Specialty Finance Group–- was suing Minor to recover the $10.5 million it fronted the project as part of a loan package that was to have eventually reached $23.6 million. The bank–- now owned by the Federal Deposit Insurance Corporation–- claimed that Minor defaulted; Minor counter-claimed that the bank and developer colluded against him.

Last June, Minor won a measure of support for that claim when an arbitrator, ruling against Danielson's company, ordered it to pay Minor $6.4 million on similar claims. Both Danielson and Minor hinted that it was a paper victory, coming against a disposable company, not an individual.

In September, Minor, having filed for federal bankruptcy protection for his hotel-creating company, tried to push the bank litigation into his bankruptcy case. However, an October 1 order by bankruptcy judge Norman K. Moon remanded the case to the bank's turf in Georgia. Minor doesn't like that.

"The FDIC spent a million dollars to switch this case to an Atlanta courtroom 500 miles from Charlottesville," says Minor via email. "It got what it paid for."

Oral arguments began on December 14 and 15 before the skies opened up with snowfall that paralyzed the oft-sunny Atlanta area. Fulton County Judge Susan B. Forsling took advantage of her snow days to pore through thousands of pages of documents, according to Crook.

So when the arguments resumed on January 18 and 19, instead of keeping the parties in further suspense, she was ready to rule, says Crook, noting that the bank prevailed on all its summary judgment motions and cross-motions and that all of Minor's were rejected.

Crook predicts that once the order is entered in Georgia, it will be sent to Charlottesville Circuit Court where it will halt the remnants of similar litigation that had been pending before Judge Edward Hogshire (halted under the concept of res judicata, which springs from the U.S. Constitution's demand for "full faith and credit.")

This can't be good news for Halsey Minor's lawyer. Having already carried her Los Angeles-based firm, DLA Piper, into litigation that caused Minor to ring up a $3 million legal fee by last September's bankruptcy filing, attorney Betty Shumener recently began representing Minor in another of Minor's cases, an appeal of a judgment won by Sotheby's. Shumener jobbed on even after Minor's previous lawyer told the court he had to quit because communications were “rendered impossible" and that relations had “broken down irreparably.”

In that case, Minor paid Sotheby's an award of $6.6 million after the auction house prevailed on its claim that he reneged on buying three works including "Diamond Dust Shoes" by Andy Warhol. In November, New York federal court Judge Barbara S. Jones–- asserting that Minor violated a restraining notice by transferring funds elsewhere than to deserving lawyers–- cranked up the punishment by ordering him to pay Sotheby's $2.3 million in legal fees. Shumener did not immediately return a reporter's call.

Back at the Landmark, the Tyvek wrappings still flap in the winter breeze, and exposed metal studs still channel rainwater into a cacophony of flood-like sounds during showers.

Across the continent, the now Los Angeles-based man who transformed the Downtown Mall in the mid-1990s with a six-screen Regal cinema and what was originally called the Charlottesville Ice Park, expresses happiness when asked about the Georgia ruling.

"Well, justice prevailed," remarks Lee Danielson. "I believe that the project now can be completed as originally intended."

How soon the citizens of Charlottesville can expect to see action at the towering hulk is another story. Poised to take control of the project but facing the vow of an appeal from Minor, the FDIC did not immediately offer comment on what happened in the courtroom.