Dallas Jury Returns $10 Million Verdict in Dispute Over Mexican Hotel Properties Reports Thompson & Knight

Mar 11, 2011, 09:54 ET from Thompson & Knight

DALLAS, March 11, 2011 /PRNewswire/ -- A Dallas jury has returned a $10 million verdict against Dallas-based JMJ Holdings LLC and other related defendants after finding that the real estate firm and its owner violated a shareholders agreement and interfered with the development of two luxury hotel projects in Mexico's Riviera Maya region.

On March 8, 2011, after a six-day trial, jurors in the 116th District Court in Dallas found that JMJ Holdings, affiliate JMJ Hospitality LLC, and company principals Timothy Barton and Christopher Knable violated an existing non-compete agreement and fiduciary duties by unlawfully conspiring to interfere with property sale negotiations between Mexican landowners and Texas-based Resort Development Latin America, Inc.

Resort Development brought the lawsuit after landowners broke off final negotiations to develop W Hotel and St. Regis Hotel properties along the Mexican coast south of Cancun. Resort Development held a contract to purchase the property as well as letters of intent from the hotel operators and an equity investor. The agreements were rescinded based on the alleged interference by the JMJ entities. Resort Development claimed that Mr. Barton and the related defendants attempted to take over, usurp, and profit from the potential projects, which were never built.

When Resort Development was formed in 2005, Mr. Barton signed a shareholders agreement that was intended to prevent competition between his companies and Resort Development. The agreement granted Resort Development exclusive rights to pursue real estate activities in Mexico, with Mr. Barton retaining a 10 percent interest in the company.

"Our clients were close to completing deals for what would likely be two very successful, high-profile developments," says Houston attorney Hunter M. Barrow of Thompson & Knight, who served as lead counsel for Resort Development. "We're very gratified that the jury came to this conclusion, and that the shareholders agreement and fiduciary duties were recognized, which will allow Resort Development to resume its business interests."

Jurors assessed 50 percent liability against Mr. Barton and 25 percent each to JMJ Holdings and JMJ Hospitality. The verdict amount includes awards for past and future lost profits. The case is Resort Development Latin America, Inc., et al v. Timothy L. Barton, et al., No. DC-07-10870-F.

Mr. Barrow was assisted at trial by attorney Charles A. Lestage from Thompson & Knight's Houston office.

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