Tuesday, May 3, 2011

UNLUCKY LINDNER? Innuendo dogs deceased developer

Lawyers and investors hurl unproven charges at Jose Lindner  
COLUMBIA, 5/3/11  (Beat Byte) --  Talk about turning the old adage about never speaking ill of the dead on its proverbial head. 
Mostly over innuendo that he "might" have been involved in some sort of fraud, Jose Lindner (left) -- a prominent Columbia developer who died last September -- has gone from glorified to vilified almost overnight, as $40 million in estate claims and competing interests vye for a piece of Lindner's remaining land holdings in court. 
The kerfuffle is an extraordinary turnaround for the Cuban immigrant, who developed the Forum Shopping Center, Broadway Shoppes, and other local retail malls over nearly 40 years as a Columbia businessperson routinely praised for his community service.   
"Jose Lindner, who was chamber president at the time...spent countless hours working with the city to achieve a sound, reasonable tree and landscaping ordinance that benefits all Columbia," carpet baron Dave Griggs told the Columbia Tribune in 2002, for instance. 
After leaving this life a 2007 Chamber of Commerce Outstanding Citizen awardee, Lindner started a mini-Madoff-style descent with a March 24 letter to the Columbia City Council from attorney Craig van Matre, who alleged Lindner "haphazardly and probably illegally" operated a Transportation Development District (TDD) tied to one of his projects.  
Now comes a Columbia Daily Tribune article Saturday by business reporter Jacob Barker that could outright scorch the Lindner legacy -- if it hadn't instead revealed all the holes in the case that Lindner was a crook. 
Pieces of Providence
Mostly quoting from courthouse filings tied to Lindner's estate and hypothetical commentary from a retired law professor, Barker's Tribune story centers around lawsuits alleging Lindner concealed key information from his business partners, cheating them out of their money. 
But given the press coverage that for years followed virtually every Lindner move, that argument sounds hollow. 
Take the well-reported case of Providence Farms, LLC, a Lindner holding company that in 2006 purchased roughly 1,200 acres south of Columbia -- near the little town of Providence -- a transaction played out in nearly a dozen Trib and Missourian stories. 
Following up as early as February 26, 2008, the Columbia Heart Beat reported that Lindner intended to sell the Providence Farms land.  
"Conservationists, here's your chance!" we wrote.  "The Lindners are offering about 1,200 acres along the Missouri River for sale.  Asking price: about $41,000,000.  Back in November 2006, the Forum Development Group proprietors purchased the acreage through their Providence Farms, LLC.   It included the former Smith Hatchery property and hundreds of other acres along Old Plank Road." 
In a coincidental 2009 story he wrote for the Columbia Missourian, Barker himself characterized a transaction between Providence Farms, another holding company called HMI RIMIC, LLC, and its principal Rory Holloway, as little more than the sale of a stalled project. 
"At the beginning of June, the Lindners began looking for a buyer of their own and moved the 1,200 acres from Providence Farms, LLC, to HMI RIMIC, LLC," Barker wrote -- on August 8, 2009.   "Whatever the Lindners wanted to do with the 1,200 acres that lie just south of Columbia ...didn’t work out." 
But Saturday's Trib story implies Providence Farms may have been involved in shady dealings with HMI and Holloway -- a former advisor to boxer Mike Tyson.  Tyson sued Holloway, Don King, and a host of other managers -- not exactly news in Tyson's world -- and Holloway, the Trib story alleges, may have been involved in a separate grand jury investigation, though he was never named and the charges against him are vague. 
Lawsuits from two of Lindner's wealthy, seemingly-sophisticated investors join the fray, claiming Lindner kept them in the dark about Providence Farms' dealings with HMI/Holloway and others.  One of those lawsuits, Barker's story reveals, was filed by Thomas Harrison -- Craig van Matre's law partner
Default insurance? 

Only three transactions -- which Barker characterizes as "odd" -- took place between Rory Holloway and Jose Lindner, according to the Boone County Recorder's website
The men signed two separate "quit claim deeds," appearing to give -- and take -- Providence Farms' land to and from one another, all on the same day.  That does seem odd, but further examination indicates Lindner may have actually been protecting himself and his partners in an owner-financed land contract. 
The second quit claim deed may have been an "insurance policy" Lindner executed in case Holloway defaulted on monies he owed Lindner for the 1,200 acres.   A "Note" on the Boone County Recorder's website explains the situation.    
In the first quit claim deed, Lindner deeded the land over to Holloway, filing that deed the day it was signed -- June 10, 2009. 
Possibly to protect himself in the event Holloway defaulted, Lindner had Holloway sign a second quit claim deed that same day, handing the land back over.  The second deed -- like an insurance policy -- would only be filed if Holloway defaulted on his debt to Lindner, which he apparently did in August 2010.   The contract between Lindner and Holloway called the practice retaining "the right to reconveyance of the property in the event of breach or default on the duties and obligations of HMI." 
The Recorder's Note also explains that Lindner imposed a number of restrictions on Holloway, dousing the argument that Holloway had free reign to do as he pleased with the property, to the potential detriment of Lindner's investors.  "HMI RIMIC, LLC has no rights to convey, or encumber, or otherwise engage in any transaction with respect to the property, other than as specifically provided in the contract." 
When HMI defaulted, Lindner could simply file the second quit claim deed and have the land back instantly -- no fuss, no muss, no drawn-out foreclosure proceedings.   Lindner filed the second quit claim deed on August 6, 2010
Hear Ye!  Hear Ye! 
Both investor lawsuits claim Lindner "improperly concealed the existing indebtedness of Providence Farms...and did not use the loans secured with their guarantees for improvements to the Providence Farms land," Barker's Tribune story notes. 

But at least eleven deeds of trust securing over $30 million in Providence Farms debt (variously paid off) between 2005-2010 are on file with the Boone County Recorder.   The Recorders Note on the Holloway/HMI contract additionally states that "all parties having any interest in the property are hereby given notice of the contract...copies of which can be examined at escrow agent Boone Central Title." 
Given the public, well-reported nature of all this, how Lindner's partners were left in the dark remains a mystery itself.   Even nearby landowner Robert Sapp knew what was up with Providence Farms, telling Jacob Barker in 2009 he "never expected the Lindners to put up any new buildings."  
"He had some wild dreams about it, I guess," said Sapp, who sold Lindner some Providence Farms property, most of which "can’t even be built on," he said.  "I wasn’t worried at all about it.  I thought it was a pipe dream, and I guess it was."
RELATED:  Providence Farms, closely followed

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