More details have emerged on how the alleged failed transactions involving Delta Community Credit Union led to a judge awarding the real estate developer involved $75 million.
According to the suit filed by David R. Pearson in 2010, Delta Community allegedly backed out of a $30 million deal that would have allowed the real estate developer to purchase several properties along Florida’s Gulf Coast from lenders that wanted to sell them.
Pearson alleged the credit union’s breach came about when it deprived him of funds to finalize the acquisition of two properties, according the lawsuit. Pearson said $100 million had already been invested in NatureWalk, a Florida community of 278 single-family lots.
According to the suit, 220 of those lots had been developed. Through a negotiation, Pearson agreed to buy the property’s note for nearly $8 million. He claimed Delta Community blocked the transaction. Superior Court Judge Robert Flournoy agreed, according to the judgment.
For his alleged losses, Flournoy said Pearson was entitled to $54.9 million on NatureWalk and nearly $20 million for other properties and attorney fees.
Rather than have a jury trial, Pearson and Delta Community agreed to have a bench trial, which took place Dec. 14 to Jan. 9, according to the judgment and Pearson’s attorney.
Delta Community is planning to appeal and believes the judgment is not supported by facts or the law, said J.D. Humphries, one of the Atlanta attorneys representing the credit union.
In an internal letter to employees, Delta Community CEO Rick Foley said the credit union is upset about the amount of the award and believes the judgment is “unwarranted and contrary to the facts or applicable law.”
Foley also told employees that the credit union “is well capitalized and has sufficient reserves to cover the cost of the award, if necessary.”