STAR-BULLETIN FILE PHOTO / FEBRUARY 2007
A lawsuit alleging Big Island developer Brian Anderson mishandled investors' money intended for the redevelopment of the Ilikai Hotel was dismissed. Above, Anderson, left, posed with twin sons, Cord, middle, and Brad, last February.
Ilikai lawsuit dismissed
U.S. District Judge David Ezra has dismissed a lawsuit alleging that Ilikai hotel developer Brian Anderson mishandled investors' money in his attempt to redevelop the landmark Waikiki property.
However, Ezra is giving the plaintiffs - Network Development Properties LLC and California investor Gordon Carlson - a chance to present new allegations to satisfy legal requirements by Sept. 19 in order to proceed with the lawsuit. The judge lifted a week ago a temporary restraining order filed by the plaintiffs preventing Anderson's condominium sales efforts.
"We believe the case was brought just to try to slow down or stop the sales efforts," said Jim Bickerton, Anderson's attorney. "It really is a concerted effort to push the loan into distress because there's a lot of vultures trying to make a deal here and make some money."
Anderson didn't return calls for comment yesterday. John Dwyer Jr., attorney for the plaintiffs, also didn't return calls for comment.
Network Development and Carlson, who invested $5 million to help Anderson purchase 343 rooms and redevelop the Ilikai, filed the lawsuit on June 13 seeking to remove Anderson as manager of the Ilikai, stop him from using any assets or company funds for his own benefit and prevent the authorization of a "fire sale" of the unsold rooms for an average $200,000 per unit. The plaintiffs withdrew a preliminary injunction prohibiting sales at below-market prices days before the Aug. 22 hearing.
The suit is among a number of complaints against Anderson in recent years, including a $72.6 million foreclosure on the Ilikai filed last week by lenders.
"(The plaintiffs are) pretending they're concerned about the conduct of business, but they're actually trying to stop the business from operating, which is the last thing to do if you're trying to pay off creditors," Bickerton said.
The plaintiffs have been actively soliciting investors to secure financing to buy the mortgage on the embattled Ilikai hotel, which has been the scene of controversy for two years over its redevelopment, according to Bickerton.
Local developer Peter Savio, an expert in condominium conversions, bid last month to acquire some 200 units in bulk - a move that potentially would bail out Anderson from his lenders. Savio also is considering becoming the broker for the project.
Network Development, an affiliate of Marshall Reddick Real Estate Network, earlier proposed a partnership with Savio to buyout Anderson, though Savio declined.
Savio, who is trying to secure financing for the purchase, said he has received at least a half dozen calls from interested buyers, including some from California, Chicago, Japan and China.
"Marshall's doing what I'm doing and I'm doing what other buyers are doing, which is trying to find financing," Savio said. "It's a huge gamble to take if you don't have financing, and in this market, it's a huge difficulty to get financing."