Colorado judge punts ‘massive’ lawsuit involving $300 million Kindred Resort to New York court
Amid dueling allegations of fraud, Judge Reed Owens ruled that the Colorado lawsuit had been initiated at least in part to ‘harass’
A Breckenridge judge last month granted a stay in a lawsuit involving two firms picked by Vail Resorts to co-develop the $300-million Kindred Resorts, a luxury ski-in, ski-out commercial and residential complex in Keystone.
Describing two “massive” lawsuits, one in New York City and one in his own Summit County courtroom, Judge Reed Owens ruled New York was the proper venue for the dispute, adding he believes the Colorado case had been intended, at least in part, to “harass.”
“Allowing the two actions to concurrently progress would do a disservice to judicial economy and create a potential for conflicting rulings as two separate courts grapple with the same controversy,” Owens wrote in the July 7 order to stay. “This unnecessary and potentially confusing duplication of judicial effort is precisely what the priority rule attempts to avoid.”
Kindred Resort broke ground last fall at the base of Keystone Resort, next to the River Run Gondola, and is scheduled to open in 2025. With a 107-room hotel, 95-luxury residences, three new restaurants, a new ski school home, retail space, a full-service spa, ski valet and a private club, a Kindred Resort spokesperson described the development as “one of the most exciting real estate projects in the ski industry right now.”
But the two lawsuits have belied the glitz and glamor of the ritzy estate as once-business partners have exchanged various claims of fraud, extortion and other multimillion-dollar claims of malfeasance.
Vail Resorts first introduced the Aspen-based One River Run Acquisition, now the ownership group in Kindred Resorts, and Greenwich Group International, a national real-estate investment firm, in fall 2020 to discuss developing Kindred Resort, according to court documents.
After extensive negotiations, One River Run and Greenwich Group agreed to a 50-50 partnership that would combine One River Run’s development expertise with Greenwich Group’s fundraising skills and outlined the deal in a letter agreement, the court documents state.
The partnership, however, quickly deteriorated.
In fall 2022, the two firms filed dueling litigation: One River Run raising claims of “fraud, tortious interference, defamation and extortion” against the Greenwich Group in a New York filing and the Greenwich Group filing claims including fraud, fraudulent conveyance and fraudulent nondisclosure in Summit County court.
The order to stay closes the Colorado case, at least until there is a resolution in the New York case, which contains many of the same claims.
In a news release last week, One River Run and Kindred Resort lauded the halting of the Colorado case as a positive ruling that “allows (One River Run) to continue on the offensive seeking damages of more than $70 million for fraud” against Greenwich Group.
One River Run claims in the New York case that Greenwich Group lied about its competency in order to induce One River Run into the letter agreement and that Greenwich Group breached its duties under the agreement by failing to secure any financing for the project, according to court documents.
“We’re obviously thrilled with the Court’s recent rulings,” One River Run attorney Chris Mills said in the release. “It has always been our position that (Greenwich Group’s) case is a garden-variety breach of contract dispute based on an unenforceable contract.”
Highlighting an earlier ruling by Owens that struck down Greenwich Group’s claim of ownership in the Kindred Resort property, Mills said in the news release that the halting of the Colorado case will allow One River Run to focus on the New York ligation.
“(Greenwich Group) mischaracterized its lawsuit as something more and filed in Colorado merely in an attempt to tie up the property to create leverage,” Mills said. “The Court’s rulings recognize exactly that — (Greenwich Group’s) case never had anything to do with the property and that (One River Run) can now focus on pursuing its claims, including for fraud.”
In the order to stay, Owens noted that in New York filings, Greenwich Group had continued to argue that the case should go forward in Colorado, not New York, because of Greenwich Group’s claim of ownership in Kindred Resorts.
The fact that Greenwich Group continued to argue a claim of ownership even after Owens had dismissed it, the Colorado judge wrote in the order to stay, “supports the argument that the Colorado action was designed — at least in part to harass (One River Run).”
The stay in the Colorado case leaves much unresolved. Greenwich Group in a statement provided by their lawyer, Carl Regelmannn, continued to push back against One River Run’s fraud claims, insisting the investment firm helped bring $85 million in funding to Kindred Resort and that One River Run “heavily benefited” from its work.
“(One River Run) has used scorched earth tactics to try to harm the reputation of (Greenwich Group) and any executives or businesses with any remote connections to (Greenwich Group),” the statement from Regelmann said. “(Greenwich Group) will not bow down to these ineffective and baseless bully tactics.”
Before Greenwich Group became involved, the Kindred Resorts project had stalled, according to the statement from Regelmann, which claims “(Greenwich Group) broke the logjam, brought the project back to life, and within 6 months had arranged for all the project’s financing needs.”
While raising its own claim that One River Run misrepresented its initial investment in Kindred Resort by more than $8 million, amounting to fraud, Greenwich Group in the statement dismisses the allegations of fraud and other malfeasance it is facing.
One River Run’s allegations have “no merit,” the Greenwich Group said in the statement, adding “their requests for damages are nothing more than a sensational number intended to intimidate and deflect attention.”
Greenwich Group further said in the statement that it believes the evidence will support its claims and that it has been pleased with “the New York judge’s comments, rulings, and attention to detail at the initial court appearance.”
Greenwich Group “looks forward to having their claims heard – whether in Colorado or New York,” the statement says, and the group “is confident that they will prevail on their claims against (One River Run).”
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