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Opinion: Pay-to-Play Scheme

Posted 06-10-2020 at 12:04 PM by TennTitan


Opinion:

The lawsuit which started out as an attempt to force Bald Eagle Partners (BEP) to pay past club dues, that are allegedly owed, has morphed into a pay-to-play scheme.

SPC and RBP, former partners in the purchase of the Rarity Bay assets, are no longer very nice to each other. But, on the chance that each could acquire some much needed funding, both joined to file a lawsuit against BEP. They used one attorney to represent both interests, but that has not turned out so well. In fact, that attorney was relieved of his duties immediately by the Court when the Judge came to understand what was going on behind the scenes. All the other attorneys have now been replaced, as well. There are many other stories to tell but this blog is in reference to the intentions of the parties.

In the beginning, the documents filed were adversarial, as expected. The tenor changed over time as BEP and SPC (declarant) realized that they could work together on a development project within Rarity Bay, known as, at least by some, "The Cottages of Rarity Bay." For BEP to obtain certain rights and advantageous terms in the accompanying agreement, BEP was willing to pay $500k to “settle the lawsuit,” even though their position was well-defended and the declarant thought the lawsuit was, "risky." This amount was far below what was expected by RBP in relation to damages in the lawsuit, claimed to be over $2M. But the declarant needed the money and was willing to settle, splitting the money with RBP. Due to the declarant’s poor financial situation, RBP had put up the money for the costs of litigating the lawsuit, and SPC would need to reimburse their portion of the expenses with settlement monies.

The declarant, however, attempted to settle the lawsuit, personally, without the approval of RBP, which was in breach of the “Collection Agreement,” between the two parties. Information was concealed from the SPC/RBP attorney as the declarant and agents of BEP formed the settlement agreement and the dismissal of the case. BEP’s attorneys helped to conceal the settlement agreement, as well, along with concealing the lifting of the liens placed upon BEP lots. The SPC/RBP attorney knew nothing of the declarant’s newly-formed intentions, until he received a notice of a motion to dismiss, from the Court.

The Judge is now deciding on how to proceed, but is well aware of the declarant’s intent to secretly settle the case, in breach of the terms of the Collection Agreement with RBP. But a breach of the agreement is not the case that has been assigned to her. Meanwhile, realizing that the case could be dismissed, RBP filed another lawsuit in Knox County (state court) against SPC for the breach of the collection agreement. State Court is the appropriate venue since RBP and SPC are both Tennessee entities, lacking diversity. The case against BEP is being litigated in a Federal Court, because BEP is not a Tennessee entity.

Updates to this specific Court action will be reported as they occur.
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  1. Old Comment

    SPC/SPCP (RBP) Collection Agreement (excerpt)

    3. Settlement Resolution. SPCP (RBP) shall have authority to enter into settlement and/or mediation discussions, conferences, and/or negotiations. The terms of any final resolution of settlement will be subject to mutual agreement of both SPC and SPCP (RBP).


    Case 3:18-cv-00443-PLR-DCP Document 44-1 Filed 10/03/19 Page 1 of 2 PageID #2 2755
    permalink
    Posted 06-11-2020 at 09:36 AM by TennTitan TennTitan is offline
 

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