When Alex Calderwood died unexpectedly at age 47 in November 2013, his elderly father, Tom, was appointed as the personal representative of Alex's estate. At the time of his death, Calderwood owned a 51.74 percent member interest in Ace, asserts the lawsuit.
The suit filed outlines how, in the wake of Alex Calderwood's death, Wilson conspired with Ecoplace, which is controlled by Calderwood's former business partner Stefanos Economou, to wrongfully exclude Tom from the hotel company his son founded. The suit alleges that Wilson conspired with Ecoplace by hiding the true, strong financial condition of Ace so that Wilson and Ecoplace could acquire the Estate's majority interest in Ace for far less than it was worth. The lawsuit also asserts that Wilson's actions are in breach of his Ace agreements, in breach of the implied covenant of good faith and fair dealing, and in breach of his fiduciary duties.
According to the lawsuit, Wilson allegedly attempted to extort and defraud the Calderwood Estate by:
- Using Ace assets to commission a bogus appraisal of Ace, valuing Ace at $200,000, for the purpose of convincing Tom Calderwood to give up the 51.74 percent majority interest in Ace or to sell that interest at a fraction of its true value by undervaluing Ace by many millions of dollars;
- Conspiring with Ecoplace to pay exorbitant bonuses ($1.5 million in aggregate) to himself and another Ace employee, and to make undisclosed distributions to Ecoplace of $2 million in self-dealing transactions intended to simultaneously make Ace appear less valuable, thereby facilitating a purchase of Calderwood's interest at a severely depressed valuation, while nevertheless providing Wilson and Ecoplace with financial benefits;
- Manipulating Ace's financial statements to hide Ace's true financial condition while also refusing to explain Ace's financial statements to the Calderwood Estate; and
- Deliberately failing to use his best efforts to manage and grow Ace and make Ace more profitable and valuable.
"We really wish it hadn't come to this, but Alex's Estate is the majority owner of Ace. After countless days, months, and now years of trying to secure the Estate's rightful claim to Ace, there was really no alternative but to pursue this litigation," said Jim McDermott, lead attorney for the Calderwood Estate.
The Calderwood Estate is represented by James T. McDermott and Ciaran P.A. Connelly of Ball Janik LLP.
The lawsuit is available here:
This lawsuit directly follows two other lawsuits filed against Ace. In the first, the Calderwood Estate filed suit against Ace, Ecoplace and Economou in March 2015 and that case is now pending in the Commercial Division of the Supreme Court of New York for New York County (amended complaint, second amended complaint). Then, in August 2016, Tungsten, a 4% owner in Ace, filed suit against Ace, Ecoplace, and Economou alleging, among other things, that Wilson has mismanaged Ace in the wake of Calderwood's death. Tungsten further alleges that Wilson's mismanagement is either proof of incompetence or as a result of a "deliberate effort" to "stifle the growth of the Ace brand value during litigation with Alex Calderwood's estate" or both. See the Tungsten complaint.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ace-hotel-president-brad-wilson-accused-of-conspiracy-to-defraud-alex-calderwoods-estate-in-multi-million-dollar-lawsuit-300345784.html
SOURCE Ball Janik LLP