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Fla. Judge Revives Trump Casino Dispute
Attorney for celebrity developer's ex-confidant acknowledges it's unusual for a defendant to push for a stayed case to get moving again
Daily Business Review
October 28, 2009
A former Trump protege wants another round with The Donald.
Broward Circuit Judge Jeffrey Streitfeld has revived a lawsuit at the request of developer Richard T. Fields after a 2008 settlement fell through.
Trump Hotels & Casino Resorts Development sued Fields and the developers of the Seminole Hard Rock Hotel & Casinos for an estimated $1 billion, alleging the celebrity developer's former confidant conspired to cut him out of a deal to develop two casinos for the tribe.
To end the fight over the Seminole casinos, Fields agreed last year to buy an Atlantic City, N.J., casino from Trump Entertainment Resorts for $316 million. But the New Jersey casino deal collapsed when Trump's companies filed for bankruptcy.
Fields asked to revive the Broward case. Streitfeld agreed this month to vacate a stay imposed last year and set a trial date next fall.
Fields' attorney, Michael W. Moskowitz, acknowledges it's unusual for defendants to push for a stayed case to get moving again.
"We believe this case is specious. It's nothing more than a contrivance by the Trump side," Moskowitz of Moskowitz Mandell Salim & Simowitz in Fort Lauderdale said in an interview.
Baltimore attorney Scott Marder, who represents the Hard Rock developers, is equally dismissive. "It's a frivolous case that's been hanging over my clients' heads since December 2004," the Duane Morris partner said. "They have a right to have their names cleared in a public trial and to then recover the enormous attorney fees they have spent defending against this case."
The suit also names Baltimore developer Cordish Co., partner Joseph Weinberg, Power Plant Entertainment, Native American Development and Fields' Coastal Development. Fields and Cordish formed Power Plant Entertainment for the Seminole development.
Trump Entertainment Resorts spokesman Tom Hickey said the defendants have been making the same "shallow comments" since the case began, but it has survived numerous attempts by the defendants to dismiss or have the judge find in their favor.
"We have shown the judge significant facts to support our case," he said. The Trump companies thought it would be beneficial to stay the case through the bankruptcy process but "are happy to proceed on a schedule established by the judge."
A June 25 motion filed in bankruptcy court refers to Trump's lawsuit as a "shakedown" requiring the defendants to expend substantial sums of money or engage in expensive litigation.
U.S. Bankruptcy Chief Judge Judith H. Wizmur in Camden, N.J., in August allowed the Broward case to be revived.
Coastal also filed a $17 million adversary claim in bankruptcy court over the failed Trump Marina Hotel Casino deal that seeks punitive damages. An amended complaint filed last week contends Trump hatched a self-enrichment scheme to sabotage the casino sale.
Trump "intended to strip the casino of its valuable customers and key personnel, destroy its image with its potential and current patrons, let the casino fall into a complete state of disrepair such that no lender would ever finance its purchase, cause the casino to lapse into bankruptcy and attempt to repurchase the casino in bankruptcy for far less than its fair market value," the adversary action reads.
Hickey blamed Coastal for failing to close the casino sale. "It is beyond ludicrous and reeks of desperation," he said.
Trump attorneys Herman Russomanno and Robert Borrello of Russomanno & Borrello in Miami and Kelley B. Stewart of Krupnick Campbell Malone Buser Slama Hancock Liberman & McKee in Fort Lauderdale did not comment by deadline.
MARLA MAPLES' AGENT
Trump met Fields in 1993, when he was working as a talent agent for the entrepreneur's second wife, Marla Maples. He quickly became a close confidant. Trump said in the 2004 lawsuit that Fields became "one of a select group of individuals who enjoyed direct access to Donald Trump at virtually any time."
Trump's suit said he depended on Fields to handle negotiations with the Seminoles to develop a pair of casinos on reservation land, a highly compensated role. Fields was paid millions of dollars and asked for a percentage of the casino revenue, Trump said in court papers. Auditors investigated Fields' spending.
The lawsuit contends Fields looked elsewhere to find "another developer who would agree to provide him with a share of the profits in the extremely lucrative Seminole casino venture since he knew Trump would not."
Fields allegedly defrauded Trump by telling him a Seminole development deal was not in the cards while pursuing the same plans with the Cordish Co. The lawsuit contends Fields and Cordish successfully misled the tribe into believing Trump still backed the development effort and signed an agreement in 2000 to develop the tribe's Hollywood and Tampa casinos. They opened in 2004.
The defendants argue Trump is attempting to benefit from a project he abandoned.
Moskowitz said in an interview that Trump fabricated the lawsuit claims.
"This is an after-the-fact creation of facts to support a case that does not otherwise exist," he said. "They made a decision to no longer pursue a potential transaction with the Seminoles. At a later time, Mr. Fields with other partners pursued the transaction. The Hard Rock was built, opened and became successful."
"I suspect that had it been a failure, we would never have heard from the Trump organization," Moskowitz added.
Last year, Streitfeld ruled four of six claims by Trump were time-barred. Gone were claims of breach of fiduciary duty, interference with business relationships and violations of the state Deceptive and Unfair Trade Practices Act.
Shortly after, both sides agreed to settle the remaining counts with Fields' purchase of the 27-story, 728-room Trump Marina. The former Trump protégé intended to partner with Jimmy Buffett to re-theme the casino after the 1970s laid-back anthem "Margaritaville."
But as the Trump entities struggled, they lowered the asking price to $270 million before the deal fell apart in June 2008 within days of the planned closing.
FILED FOR BANKRUPTCY
The Broward case was at a standstill when Trump Entertainment and nine affiliates filed for Chapter 11 bankruptcy in February, claiming $1.7 billion in debt. Bankruptcy judges normally take charge of any pending litigation in other courts.
This is the third time Trump's companies have sought bankruptcy reorganization. This year, Trump resigned as chairman just days before the corporations bearing his name filed for protection. Fields, Cordish and the related companies contend the failed casino deal negates the settlement and that the Trump companies intended to resume the Broward case, noting they asked the bankruptcy judge for permission to retain trial counsel.
Fields and other defendants also noted in a June 25 bankruptcy motion seeking permission to restart the Broward case that they plan to file claims against Trump Entertainment, its parent companies, officers and directors for bad faith litigation once the case is over. The case already fills nearly 70 volumes of court files.
The Trump entities replied that they hadn't decided whether to restart the Broward litigation, saying they only asked to retain litigation counsel. They argued in a July 8 bankruptcy motion that they "should not be forced to engage in extremely expensive and time-consuming litigation on movant's subjective and unsubstantiated beliefs."
Trump's companies contends the defendants' true motive "is to attempt to threaten and intimidate the debtors' directors and officers, not to seek relief to which they truly believe they are entitled."
Wizmur granted permission in July to proceed again in Broward.
"After almost five years, it is time to bring this case to a speedy conclusion. The Fields defendants appreciate the opportunity this court gave the parties to resolve this matter, but the time and effort devoted to that resolution proved to be unsuccessful," Moskowitz wrote in a Sept. 30 status report to Streitfeld.
