Duval Man Faces Texas Bankruptcy Fraud Lawsuit; the Dispute over Value Focuses on Multimillion-Dollar Transactions

Article excerpt

Byline: Abel Harding

One of Jacksonville's most prominent businessmen is accused of fraudulent transfers prior to a Chapter 11 bankruptcy filing, according to a pair of lawsuits filed in U.S. Bankruptcy Court.

But Deborah D. Williamson, the attorney representing Ed Burr, president and CEO of GreenPointe Holdings LLC and a former chairman of the Jacksonville Regional Chamber of Commerce, emphatically denied any wrongdoing.

"Fraudulent transfers in bankruptcy cases," Williamson noted, have nothing to do with fraud but are rather a dispute over value.

Similar lawsuits in Chapter 11 bankruptcy cases are not uncommon. In fact, attorneys representing Crescent's Litigation Trust have filed a similar case against Duke Energy, which owned Crescent along with Morgan Stanley, for $1 billion.

Williamson has asked the judge to dismiss the case. A ruling is expected to come sometime after Friday.

At issue are several multimillion-dollar transactions stemming from Burr's tenure at the helm of LandMar Group LLC, and his time as an executive at Crescent Resources LLC, LandMar's parent company. Burr owned 20 percent of LandMar, whose developments included the Shipyards project in downtown Jacksonville. He sold his ownership to Crescent in November 2007 and terminated his employment with both companies. Crescent and its 125 subsidiaries filed for bankruptcy in June 2009.

"Our job is to pursue claims on behalf of the creditors," said Doug Brothers, one of the attorneys who represents the Crescent Resources Litigation Trust, the plaintiff in the pair of suits against Burr. "This is a mechanism by which to do that."

The allegations in the Complaint, filed in February of this year, include:

- A $1.925 million cash payment from LandMar to Burr to cover his "2006 personal income taxes." According to the suit, the transfer was made days after Joe Carbonara, LandMar's then-controller, had informed Burr and Webb that the company had only $2 million in cash. That money, Carbonara said, was needed for operating expenses.

- Inflating the value of LandMar's holdings, specifically the assignation of a $69.8 million value by Crescent to two developments, River Hall and Southern Hills, on Nov. 19, 2007. Two years after separating from Crescent and LandMar, Burr's new company, GreenPointe, purchased the same developments for $2.4 million.

- Using the inflated values to assign a dollar amount to Burr's 20 percent stake in LandMar, which Crescent purchased in November 2007 for $4. …