Bank Behemoth's Real Estate Vertical at Center of Latest Controversy
LOS ANGELES, May 21, 2019 /PRNewswire/ -- A $98,000,000.00 million lawsuit was filed in the California Superior Court against Wells Fargo Bank and its affiliates, alleging bad faith and unlawful schemes to violate contractual obligations. The complaint alleges that Wells Fargo was motivated by greed and acted with malicious intent when it began marketing the sale of Downtown Los Angeles' prestigious Garland Center in an attempt to oust Garland Connect, which contends it has two five-year options to stay on as the Garland Center's MMR Operator. According to the allegations, Wells Fargo solicited buyers for the massive downtown Garland Center and required as a condition of acceptance of an offer that the buyer agree to participate in and implement a scheme to destroy Garland Connect.
In furtherance of their scheme to allegedly oust Garland Connect, Wells Fargo Bank, Eastdil, and Rising Realty deceitfully structured Garland Center acquisition agreements and the purported extinguishment of the Ground Lease Arrangements in ways to prevent the fulfillment of conditions that would allow Garland Connect to exercise its extension options.
According to the complaint, Wells Fargo backchanneled $2,000,000.00 to its co-conspirators, Rising Realty and HRRP, the company formed to purchase the Garland Center, for costs incurred in HRRP's efforts to terminate Garland Connect's Operating Agreement. HRRP attempted to terminate the Operating Agreement through an arbitration proceeding based on false allegations that Garland Connect was charging above market rates. Garland Connect prevailed in the proceeding and the arbitrator found that the companies had resolved to terminate the Operating Agreement and replace Garland Connect with a new MMR operator even before the purchase of the building was completed.
Having failed in its attempt to oust Garland Connect by terminating the Operating Agreement, HRRP is now wrongfully refusing to honor Garland Connect's right to exercise its first extension option, which will damage Garland Connect in an amount exceeding $98 million.
"This lawsuit further demonstrates the endemic problems that have forced Wells Fargo to pay out more than $4 billion in settlements and fines since late 2016," says Michael Jaurigue of Jaurigue Law Group (JLG). "We look forward to going to trial to prove that Wells Fargo Bank will stop at nothing to defraud consumers, business partners, and others in an effort to maximize its profits."
The case is Garland Connect, LLC v. Wells Fargo Bank, et.al. Garland Connect is represented by Jaurigue Law Group (JLG), a Glendale and San Francisco-based law firm with extensive experience in prosecuting bad faith claims and real estate transaction litigation.
Contact: Michael J. Jaurigue, Jaurigue Law Group