Newspaper article THE JOURNAL RECORD

Developers of Norman's Crimson Park Sue Student Housing Firm

Newspaper article THE JOURNAL RECORD

Developers of Norman's Crimson Park Sue Student Housing Firm

Article excerpt

Developers David Aduddell and Gary Brooks are suing a California- based student housing company that took over their $32 million Crimson Park development after the property fell into foreclosure for allegedly conspiring with lenders to take control of the property.

In court documents, Aduddell and Brooks claim that San Diego- based real estate firm Pierce Education Properties schemed to take over 792-bed Crimson Park after becoming the property manager for the troubled complex in 2009. The lawsuit claims Pierce paid itself property management fees while allowing property taxes to go unpaid and then conspired with lenders.

Pierce took over the note on the complex in August 2010 after the property fell into foreclosure.

The lawsuit goes to claim that Pierce secretly worked to usurp Aduddell and Brooks' relationship with Crimson Park mortgage holder First United Bank and Trust Co., convincing the bank to turn over the note on Crimson Park to the San Diego-based company.

With amenities like outdoor basketball and volleyball courts, a putting green and a 5,000-square-foot clubhouse, Crimson Park was just 58 percent occupied when Pierce took over management of the complex, because of discounted rents other off-campus housing complexes were offering to University of Oklahoma students at the time.

Pierce brought up the occupancy rate with an aggressive marketing campaign and rent incentives, according to the lawsuit.

Brooks and Aduddell were left on the hook for personal guarantees they signed for secondary liens on the property, the lawsuit claims.

"(Pierce) intentionally, willfully and maliciously interfered with (Aduddell and Brooks') banking relationships with the intent of causing First United to sell the promissory note and mortgage securing the promissory note to them ....with the further knowledge that plaintiffs Aduddell and Brooks would be left with large personal obligations," the lawsuit claims. …

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