Bank One Seeks $120M from Jones Lang LaSalle

CHICAGO-A three-year relationship between Jones Lang LaSalle and Bank One has ended bitterly, with both the brokerage and client suing each other over the former’s performance and the latter’s non-payment of fees. Bank One’s suit filed in Cook County Circuit Court seeks $40 million, and another $80 million in punitive damages, suggesting the real estate advisory firm pushed sale-leaseback deals that did little except generate commissions for Jones Lang LaSalle.

Besides filing its own suit seeking $1.2 million in fees four days after Bank One did, Jones Lang LaSalle says allegations against the company are without merit. “I am deeply disappointed that a company of this stature would seek to impugn others, through litigation and blame, and to avoid paying compensation for services provided,” chairman Stuart L. Scott says in a statement. “We stand behind the quality of our work and the advice of our people. At the end of the day, we are confident that our reputation for putting our clients’ interests first will prevail.”

Jones Lang LaSalle’s financial analyses suppressed expected income and boosted expenses to make the sale-leaseback benefits appear more attractive than they were, the bank says. For details, see Sale-Leasebacks Prove Costly, Bank Alleges.

“Jones Lang LaSalle plugged numbers into its financial analyses that a proper inquiry into the actual conditions and circumstances of each property would have revealed were inaccurate and unsupportable,” Bank One’s suit alleges. “Jones Lang LaSalle’s conduct demonstrates either a negligent disregard of Jones Lang LaSalle’s professional obligations or a reckless and/or intentional effort to make the transactions go forward whether or not they benefited Bank One.”

Other accusations include inadequate attention to asbestos removal, padding bills for products from companies in which Jones Lang LaSalle had an undisclosed interest and sloppy bookkeeping. That behavior, Bank One alleges, cost them more than $10 million. Because records have not been turned over, Bank One says it cannot offer a precise loss figure.

Jones Lang LaSalle began working for Bank One in March 1999, following the bank’s merger with First Chicago, already a client of the real estate firm. At the same time, Bank One was eliminating the local real estate staff in favor of outsourcing management and other tasks, such as financial analysis of its holdings. In addition to leasing and management, Jones Lang LaSalle had the exclusive on helping Bank One buy and sell properties. In addition to Chicago, Jones Lang LaSalle’s assignment quickly expanded to all bank holdings east of the Mississippi River.