Harcourt Developments has had two claims filed against it in a Las Vegas court dismissed after a US judge ruled that the complaints could not be supported.
The Irish developer’s US subsidiary – Harcourt Nevada – is carrying out a €600m (£474m) residential-led mixed-use development in Nevada. The scheme – called Sullivan Square - comprises 1,300 apartments, office buildings, a 1.5-acre park and 25 shops just six miles from the ‘Strip’.
Glen, Smith & Glen (GSG), a local US developer, was contracted as a 40% minority partner and was to sell the properties while Harcourt secured the finance. GSG alleged there had been a breach of contract and of fiduciary duty and that Harcourt was attempting to dilute its involvement in the scheme.
The fall out from the US lawsuit has had a knock-on effect for another major scheme Harcourt is planning to develop – Esplanade Quarter - in St Helier, Jersey after members of the Jersey State Parliament accused Harcourt of not informing it of its exposure to the US lawsuits. The parliament has subsequently ordered an audit of Harcourt’s finances for the £330m Jersey and asked that its preferred developer agreement be reconfirmed.
Harcourt said today in a statement: ‘Given the level of recent press interest in the matter, we would like to communicate the progress of the court action against Harcourt’s subsidiary in Las Vegas. On 7 August 2008, the order of the Clark Country District Court dismissed the claims of breach of contract and breach of fiduciary duty made against Harcourt Nevada.
‘The Court also commented on the apparent attempt to plead “fraud and conspiracy” in support of the fiduciary duty claims that it dismissed and said the complaint would not support such claims.’
Counter claim made
Harcourt said there was now only one claim remains against Harcourt Nevada which refers to its alleged failure to fund expenditures made by the manager of GSG Development Company in the sum of $2.1m (£1.1m). It said that it ‘unequivocally denies these claims were within the approved budget and approved business plan’ and said a detailed response and counter claim was being processed.
The Court said it could not for now dismiss the claim and is awaiting proof of the allegations from GSG.
Second phase of Jersey scheme planned
Earlier this month Harcourt submitted a planning application for the second phase of its Esplanade Quarter scheme. It submitted plans for 621,700 sq ft of office space, 400 flats, 1,420 parking spaces, a hotel, 65 holiday flats and public space.
In October Harcourt will also defend itself in another law suit filed in Dublin’s Commercial Court by three individuals who allege they have been excluded from the partnership set up to develop the Jersey scheme.