Woolbright, Ex-Exec Quietly Resolve Lawsuit

(This story, in slightly different form, originally appeared in ALM’s Daily Business Review.)

BOCA RATON, FL-A seven-month legal battle between locally based Woolbright Development and a former executive of the company who accused the developer of fraud, has quietly come to an end. Details of the agreement are not in court records, but a Woolbright spokesman says “the lawsuit has been amicably settled,” declining further comment.

The suit in Palm Beach County Circuit Court was dismissed after the shopping center owner, its president Duane Stiller and former executive Jonathan Porter recently reached a settlement. Porter and his attorney, Mitchell Adler, did not return calls seeking comment.

The legal dispute between Porter and Woolbright started about a month after he was fired as finance director in January. Woolbright sued Porter, claiming he had taken proprietary information from the company’s database, which contains information about 2,300 shopping centers in Florida.

Woolbright stated in court documents that it fired Porter because he “made inappropriate, negative and disparaging comments about and detrimental to Woolbright.” In a countersuit, Porter claimed he was fired because he refused to lie to lenders and investors about the cost of several retail projects to induce them to provide investment capital for the projects.

Porter started working for Woolbright as director of finance in 2004. He was responsible for securing financing for various real estate projects and developments for the company. He also worked with Woolbright’s joint venture and equity partners and lenders.

Porter alleged in court filings in April that Woolbright and Stiller required him and other executives to make “misrepresentations, fabrications and fraudulent statements to equity partners and lenders.” In his lawsuit, Porter cited two projects as examples of these claims: the Sunshine Square center in Boynton Beach and the London Square center in Kendall.

Porter also alleged that Woolbright required him to maintain two sets of corporate financial records, one for internal use reflecting actual costs and one for distribution to third parties. Woolbright denied all allegations, according to the court records.

Porter and the company fought over a $23,750 promissory note that Woolbright wanted repaid. Porter said the note was part of a bonus offered to him and other top executives in the company.

Porter said he signed the promissory because Stiller said that in order for him to avoid taxes on the bonus Woolbright would lend the bonus funds to him and take the promissory for tax purposes but never enforce it. Woolbright denied Porter’s claim.

The settlement agreement was signed Sept. 14 and the lawsuit was dismissed Sept. 24. The court also lifted a temporary injunction that prohibited Porter from using information he had allegedly taken from the company.

Although Porter and Woolbright have settled, the company is still struggling with the impact of the recession and the troubled real estate market. Woolbright, which has affiliates that own about 25 shopping centers totaling about 3.5 million square feet in Florida, was recently hit with its third foreclosure lawsuit. PNC Bank filed to foreclose on the Plaza at Coral Springs II and its $29.9 million mortgage earlier in October.

In August, the failed Guaranty Bank filed foreclosure suits against Woolbright’s West Sunset Square in Miami-Dade County, seeking $27 million; and Wekiva Riverwalk in Apopka, seeking about $29 million. Austin, TX-based Guaranty was seized in August by the Federal Deposit Insurance Corp. and sold to Birmingham, AL-based Compass Bank, which is now a plaintiff in the foreclosure suit.

Woolbright also said in September that it was cutting 25 of its 95 positions at its offices in Boca Raton and Orlando. The company stated at the time that the move “is prudent and unavoidable, in light of current economic conditions.”