StarBulletin.com

Lawsuit seeks to remove Ilikai developer from board


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POSTED: Thursday, October 09, 2008

Ilikai hotel developer Brian Anderson was slapped with another lawsuit this week seeking to remove him from the condominium association board and claiming that he persistently failed to pay association fees that now total more than $845,000.

The complaint filed on Monday in First Circuit Court by the Owners of Ilikai Apartment Building Inc., which represents minority directors and more than 100 condo owners, seeks to remove five of the seven board members including Anderson's son, Cord, Peter Herndon, John Hall and Linda Anthony. The nine-member board has two vacant positions as the result of resignations following a written demand to resign by the same group.

Anderson, who bought 16 commercial and 203 residential units in July 2006, said he didn't know about the latest suit and declined comment.

The suit claims the board members have conflicts of interest in connection with their association with Anderson's company, Anekona LLC, which has failed to pay association fees including electricity, maintenance and cable costs for nearly two years.

This has undermined the interests of the association, which has been unable to maintain and operate the Ilikai, said John Zalewski, plaintiffs' attorney. The suit also seeks unspecified monetary damages.

“;Anekona is a very large owner, which is why failure to pay its assessment causes a very large impact on the ability to govern, operate and maintain the association,”; he said.

The suit is among a number of complaints against Anderson in recent years, including a $72.6 million foreclosure on the Ilikai filed in August by New York-based iStar FM Loans LLC.

Anderson's ambitious plans to reposition the middle-age hotel into an upscale condominium with a $60 million makeover failed to come to fruition, in part due to opposition from condominium owners disheartened by the rapid deterioration of the property and hotel services since he took over.

Anekona gained control of the board of the association of apartment owners earlier this year, prompting fears that the developer would force owners to pay for improvements through special assessments.

Anderson is trying to sell the condo units to bail him out of some of his legal and financial troubles.

“;There's just too much chaos in the financial markets right now, which for Anderson may be good because it may be giving him time, he just needs time for the markets to stabilize and to find the right buyer,”; said local developer Peter Savio, who is seeking to purchase more than 200 units at the embattled hotel. “;A stable market is a bigger threat to Anderson than an unstable market. This is actually a blessing for Anderson.”;