Contentious litigation over a $300 million resort development in Keystone, which includes allegations of criminal behavior by both sides, has been pared back by a Breckenridge judge at the request of a developer who feared the case could jeopardize the high-profile project.
The judge’s order last week is a partial victory for Aspen-based One River Run Acquisition and a setback for New York real estate investment firm Greenwich Group International.
“We are pleased with the court’s recent ruling as this means that the case will not interfere with the progress of the project and GGI can no longer hold the property hostage,” said Christopher Mills, an attorney for One River Run Acquisition. “ORRA can focus on the development and counsel can concentrate on proving that we win on the facts of the case.
“We look forward to the court’s next order as we anticipate that it will further whittle down GGI’s case and narrow the scope of the legal dispute,” Mills said.
It’s a dispute that has its origins in a meeting arranged by Vail Resorts, which introduced ORRA to GGI in 2020 and asked them both to build the Kindred Resort, a ski-in and ski-out hotel and condo complex, by 2025. Its 95 condos range in price from $1 million to $6 million.
What happened next in their doomed 50-50 partnership depends on which lawsuit you read.
In GGI’s version of events, as spelled out in an October lawsuit in Summit County District Court, ORRA fraudulently moved the land Kindred is being built on into family members’ LLCs, lied about the amount of money it had invested, committed bank fraud when it deceived FirstBank, and then cut GGI out of the project entirely because GGI had uncovered its fraud.
In ORRA’s version of events, as spelled out in a November lawsuit in New York City, GGI committed securities fraud when it lied about its ability to fundraise, failed to obtain any financing and “resorted to outright extortion” by accusing ORRA of bank fraud in letters to the project’s potential lenders, thereby “threatening to scuttle the entire transaction.”
GGI filed a motion to have ORRA’s lawsuit thrown out and ORRA filed a motion to have GGI’s lawsuit thrown out. Judge Reed Owens in Breckenridge acted on ORRA’s request Feb. 22.
The judge agreed with ORRA that GGI has failed to provide evidence ORRA has been unjustly enriched and dismissed that claim by GGI. He also refused to grant GGI’s request that it be given an ownership stake in the Kindred while the legal cases play out. ORRA had warned that granting the request could force lenders to back out and cause the project to collapse.
Owens sided with GGI on another matter, however. ORRA had argued that GGI could not sue it for fraudulent conveyance based only on vague evidence, but Owens determined that GGI “just barely” provided enough evidence of fraud in its lawsuit to pursue that claim.
“GGI is glad that our case is moving forward, with the current owner of the property, ORRA Keystone, still a defendant,” the company said in a statement. “We never wanted to be in a lawsuit in the first place but unfortunately ORRA drove this into a litigious space.”
“GGI has always wanted this project to succeed — we simply want a satisfactory resolution for our extensive and well documented involvement in leading this project to fruition,” it added.
The project broke ground last October, only a few weeks before the first lawsuit.
GGI says it was ORRA, not itself, that threatened the collapse of the project when it refused to pay GGI for its fundraising work, “kicked GGI out” of the partnership and “disregarded GGI’s numerous attempts at an amicable resolution,” leading to the dueling lawsuits last fall.
ORRA’s lawsuit seeks $72 million from GGI. GGI seeks a 50-percent stake in the Kindred.
“The question as to whether this litigious path is damaging the property cannot be answered by GGI,” that company said. “It is best asked of ORRA, their investors and their advisors.”