Halsey Minor is misunderstood... Everything you've heard is wrong
Minor: "I am taking on these guys because I'm the only one who can."FILE PHOTO BY JAY KUHLMANN
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"
39 comments
Clarification, I think your post explains why he would not pay off the note then, if somehow his lawsuit could nullify or reduce it. Is that possible?
Cville Joe, sorry to hear that. As a complete outside observing this, I was inclined to dismiss the anti-Minor hysteria and recall Danielson not paying small contractors on the big ice rink project, until they sued him. Or that's what the Hook/C-Ville reported back then.
Why does the Hook insist on repeating the myth that Lee Danielson "touched off a downtown renaissance?" Hawes you were here then. You know better.
Born to fight but maybe not to win.
What a nut
Let me get this straight, he is supposed to pay the FDIC to close out the note, and then go after the former owners and directors of the failed Silverton bank? Or is the FDIC now responsible for the lawsuits over the note, until it is sold to a new responsible party?
Halsey owns the building and the ground------he borrowed money to build it and then defaulted on the note (according to the bank). He is still liable for everything that goes on there until the bank forecloses. This is like owning your own home with a mortgage and then not paying according to the terms. You own it until you lose it. If Halsey has so much money and he believes in the project so much why doesn't he just pay off the note and finish the project? He can still sue whoever he wants (have his cake and eat it too). If he has so much money this would be small change for a man with destiny.
Archie........ so true! :)
I have one question. He stated his net worth, but that was 2007. I am sure a lot of people were worth a lot more money 2 years ago. Seems to me that the rumors were that he went broke recently. What is the November 2009 net worth?
Mr/Mrs/Miss really now, what did you just ask?
Dayum public schools!
quote: (Minor) alleges that everything the public has been told about him in recent days is wrong.
Been there, done that myself. In national news coverage no less. One lie right after another as the guilty, ignorant or mistaken parties tried to cover their own butts and shield themselves and their employers from civil liability. Unlike Minor though, who seems to take two steps forward and one backwards unfortunately -- my mission has been full steam ahead, take no prisoners, slay them as I go! (Wasn't hard in my cases, the judges could clearly see the actions against me were so blatantly wrong and fictitious from day 1, and the coverups thereafter were transparent as glass.)
I have no trouble believing Minor. It seems as if various people have tried to use his wealth for their own personal gains.
Isn't this rusting structure violating the city rules against blight? Why isn't he being fined? Anyone else would be held responsible.
Mr/Mrs/Miss Whizer, the unfinished hotel looks 25 times better than the Pauline Hamlin property on Angus Road.
We have had a lady living in a sloppy tent on Angus Road with garbage piled up everywhere FOR DECADES, yet the city can't so anything about it. What makes you think they can do anything about this hotel?
Richie-----I think this will all come out in the trial----Minor has now put his net worth in play and it will all become public. Too bad that his "principle"attitude is messing up the community he says he "loves". People who have values and real principle do not behave in such a contentious and spoiled manner. People with values don't seek to destroy everybody as Halsey has done throughout his career. Hasley has issues that are his demons and he will have to deal with them. Meanwhile it will all be in the courts.
Has anyone really been far even as decided to use even go want to do look more like?
What is sad is the fact that some of the honest working engineers, architects and designers, with contracts soley with Halsey Minor, and who provided and completed their services for the hotel project still have not been paid for there work. These fees owed are "minor" compared to the millions of dollars being discussed in the law suites, but the affects of this loss of income to these small firms are dramatic and damaging.
Minor claims that he "stupidly wanted to help Lee [Danielson] rehabilitate his reputation." How gallant. Why don't they both rehabilitate their tattered reputations and finish this damn thing? Basically, two rich guys are having a protracted argument, and we have to deal with the blight. Then Minor bullies the local paper (The Hook) for daring to report on this mess that we have to look at every day. How pathetic.
THIS WAS POSTED BY THE ARTBLOG.COM
"There is no logical connection between Sotheby's failure to disclose a security interest and any actual or potential injury to ”Š Minor"
Though it comes in the fairly narrow context of a motion for leave to amend his counterclaims, there is some language in a recent decision in the lawsuit that would seem to be pretty devastating to Halsey Minor's overall case against Sotheby's. First, the court rejected the idea that the alleged non-disclosure could have injured Minor in any way:
"Minor does not allege that ... the paintings were auctioned at an inflated price because of the failure to disclose the security interest. To the contrary, because the paintings were sold [to him] at auction, Minor set the price for the paintings. . . . As explained above, the allegations in the proposed counterclaim do not support an inference of any connection between Sotheby's conduct and any actual or potential damage to ”Š Minor”Š [B]ecause Minor pleads no facts to support an inference that Sotheby's security interest affected the value of the paintings, he fails to identify how Sotheby's failure to disclose this interest was material."
The court also rejected the notion that Sotheby's had fiduciary duties to Minor in connection with the sale:
"In arms length commercial transactions, 'no relation of confidence or trust sufficient to find the existence of a fiduciary relationship will arise absent extraordinary circumstances'" (quoting DeBlasion v. Merrill Lynch & Co., Inc., 2009 WL 2242605).
I believe Sotheby's own motion for summary judgment is still pending.
More Minor legal news here.
POSTED BY DONN ZARETSKY AT 10:48 PM
What a jerk!
Whizer, who actually owns this thing? Maybe the city would have to fine the FDIC, which is trying to liquidate the failed bank.
Very simple-------Minor says he wants to finish the project---nothing is stopping him---he can still finish it and perhaps win his lawsuit and still collect (if there is anything to collect). The suit has nothing to do with the ability to finish the project. But if he doesn't finish it and the bank does foreclose then all bets are off for Minor. If he does have the money there is absolutely no reason not to finish it. He will get nothing from the lawsuit even if he wins. His reasoning, for a businessman, seems very flawed from what I know about it. Frankly, Minor's very long history fighting and carrying on doesn't look good for the long term prospects no matter what. He probably would fight with the customer over customer service at the hotel. Besides, how much time will he spend in Charlottesville? I heard that he lost his airplane too.
As far as Danielson/Rolf are concerned the Ice Rink/movie theatre are built, all the contractors were paid and that is decade old news. There were no hangups finishing the project but rather disputes that were resolved that did not adversely effect the community but enhanced it. So trying to drag Danielson/Rolf into this is not germane to the issue. Does Minor have the money to finish is the issue.
my goodness === it sounds like HM is trying to mitigate his losses and blame Danielson for all the good things he did for the City and the people of C'ville. Not many UVA alum's know anything about the West Coast. Thanks Halsey and congratulations on your foreclosure of your farm and thanks to KDog for his insightful thoughts.
Mr/Mrs/Miss please, I guess you are/were a James Camblos fan?
He lost every bid for a judgeship! Get over it! :)
Well you are on the right track-------Halsey says he is going to finish the hotel then he can do it with cash because he has a lot of money. Meanwhile, SFG is broke so how is he going to get anything from them and Danielson probably is small potatoes too. So what is the lawsuit all about? Certainly doesn't seem to make much sense to spend $1.8M on legal fees to collect nothing. And if he has the money to complete the project then that seems the most logical approach. Standing to lose it in foreclosure doesn't seem like a good prospect but finishing it would be the best. What is being proven by suing broke institutions?
Were you here CC ? Danielson and his partner Rolf were responsible for the ice rink, the grandest I've ever seen in a town this size, the movie theaters, and Downtown Grill. That's a renaissance in my book, and set off a slew of other restaurants and businesses opening.
Right, but my question is: if he has a lawsuit pending for $x against the bank that wrote the note, why would he pay $y to close out the note? Why not wait and pay $(y-x)? That why I asked if it is possible, what happens when the FDIC takes over. I guess you are saying it gets all the assets without any of the liabilities, which may indeed be true. That was my question.
The problem with Minor is that he has enough resources to clog the court system for years, while Charlottesville is stuck with an eyesore, and taxpayer's foot the bill for the wasted court time. It is far more likely that Minor realizes the Landmark will never make money when finished, and is looking for an exit strategy that protects his cash.
He doesn't owe Sotheby's or Chrisite's any money???????? yet he bid on the paintings, didn't pay, leaves them with the art work, and he doesn't even pay the buyer's premium. If Halsey sold paintings at a sale and didn't get paid he might be upset and SUE someone. Now he buys and thinks there is no harm done. Does he have any scruples? It is ALWAYS someone who is at fault but not "Arthur".
why do reach people get involved with project like this. enjoy your money, invest it wisely and get your 8-10 yearly%, buy a few houses and relax. This guy was willing to waste millions on this hotel just to get a h-job from the public. what a fool.
Appears that Halsey has lost in Hialeah, Sotheby's (judge threw out Halsey's "class action" suit), Landmark (dismissed motion for TRO), Merrill Lynch (summary judgment), Sotheby's (Judges opinion 10/26/09)and his attempt to buy the tracks in Maryland. I think he needs to sue the judges and everyone who has been damaged so he can be smarter than everyone. He can appeal the Merrill Lynch case but if he doesn't post a bond he cannot stop his art from being sold and what will he gain in an appeal? NOTHING!!! He can't afford to post a bond. He is making some attorneys (if he is paying them) very, very happy with nothing coming back the other way. Obviously Halsey is a true patriot(?).
chouva, can you tell me where to earn 8% to 10% on my money please? I don't have $120 million, but I do have some money I would like to invest if I can earn 8% to 10% yearly.
he could probably get Cheryl Higgins to believe his "everyone is lying but me" story. Unfortunately for him, such naive judges rarely rise higher than the circuit court level (unless they carry water for some powerful political interests).
Unfortunately for Charlottesville, we have to wait until the clock runs out on all his litigation before he is removed from this project. What he sees as malice on the part of the bank and other developer is them seeing him for what he is, a hindrance to the project finishing.
you better be getting about 20% this year, some yrs are good, some are bad, but you can get that with the right advisors.
OK, I'm game.
Give me the name of an excellent local financial advisor please.
gas bag... wanna get 8% return?
Become a state government.. you get 8% on all the money everybody makes plus 6% on everything they buy...
Plus its all tax free and you can waste it on whatever you want without accountability....
According to that filing, project investor... Buyco... was told by project lender Specialty Finance Group LLC that Specialty would sell the development's loan to a "loan shark" if Buyco didn't provide funds to complete the project.
The alleged threat occurred after Buyco last fall provided just over $4 million to help cover the project's costs, according to Buyco's filing for receivership in Milwaukee County Circuit Court.
Specialty Finance, a unit of Atlanta-based Silverton Bank, then demanded Buyco provide additional cash. Buyco says it eventually provided another $10.4 million for the project.
Whetted your appetite? Yes, that's the same bank unit Minor accuses of strong-arming him. Look Minor is a colorful and sometimes silly figure, but if you think his accusations against an Atlanta go-go finance operation that specialized in mid-sized construction loans (mainly for hotels) are ludicrous, think again. It's not a business unknown for crookedness.
The Milwaukee hotel project (also on Water Street!) is like ours an unfinished downtown building. Unlike us, Milwaukee is a big city so the story is smaller, and no colorful zillionaires stand out. (But Iceland is involved!) Admittedly, the structure is probably less of an eyesore, as the hotel is actually finished enough to be furnished already.
Here is another similarity:
The lender for the development is Specialty Finance Group LLC, a subsidiary of Atlanta-based Silverton Bank. In its court filing, [Buyco] says the bank advanced $13.4 million for the development but has not fully funded its construction loan.
Buyco took the prudent step of asking a local court to appoint a receiver to take over the project.
Lawsuit: Staybridge investor faced 'loan shark' threat
By Tom Daykin of the Journal Sentinel
June 26, 2009
Iceland investor wants receiver to complete Staybridge project
BizTimes Real Estate Weekly
June 24, 2009
If it were me I would have my lawyer show the Hook where my money is and how much exists to prove that I am suing on principle and not to save my a$$.
This simple act would wash away all of the speculation about his motives.
Well?
quote: "I have one question. He stated his net worth, but that was 2007. I am sure a lot of people were worth a lot more money 2 years ago. Seems to me that the rumors were that he went broke recently. What is the November 2009 net worth?"
http://www.scribd.com/doc/22086941/Minors-Motion-for-Summary-Judgment-Full
dated 21 September 2009
Mr. Minor had a net worth of $119,596,700 (twelve times the amount outstanding under the loan). Mr. Minor's net worth today is nearly double his net worth in 2007.
quote: "What is being proven by suing broke institutions?:
It's the thrill of the kill! :)
GSOE hearts rich people.