Wade Park Land Holdings, LLC v. Kalikow

• Citation: 522 F.Supp.3d 1341
• Decision Date: 24 February 2021
• Docket Number: CIVIL ACTION FILE NO. 3:20-cv-176-TCB
• Parties: WADE PARK LAND HOLDINGS, LLC; Wade Park Land, LLC; and the Thomas Family Trust, Plaintiffs, v. Jonathan KALIKOW; WP Development Partners, LLC; Gamma Lending Omega, LLC; Gamma Real Estate Capital, LLC; GRE WP, LLC; and Blake Goodman, Defendants.
• Court: U.S. District Court — Northern District of Georgia

522 F.Supp.3d 1341

WADE PARK LAND HOLDINGS, LLC; Wade Park Land, LLC; and the Thomas Family Trust, Plaintiffs,

v.Jonathan KALIKOW; WP Development Partners, LLC; Gamma Lending Omega, LLC; Gamma Real Estate Capital, LLC; GRE WP, LLC; and Blake Goodman, Defendants.

CIVIL ACTION FILE NO. 3:20-cv-176-TCB

United States District Court, N.D. Georgia, Newnan Division.

Signed February 24, 2021

David Lee Bury, Jr., Ward Stone, Jr., Stone & Baxter, LLP, Macon, GA, James William Cobb, Jessica Arnold Caleb, Julia Blackburn Stone, Caplan Cobb LLP, Atlanta, GA, for Plaintiffs Wade Park Land Holdings, LLC, Wade Park Land, LLC.

David Lee Bury, Jr., Stone & Baxter, LLP, Macon, GA, James William Cobb, Jessica Arnold Caleb, Julia Blackburn Stone, Caplan Cobb LLP, Atlanta, GA, for Plaintiff The Thomas Family Trust.

Adam C. Rogoff, Pro Hac Vice, Kramer Levin, Michael J. Dell, Pro Hac Vice, Natan M. Hamerman, Pro Hac Vice, Kramer Levin Naftalis & Frankel, New York, NY, Craig G. Kunkes, Richard Lance Robbins, Robbins Ross Alloy Belinfante Littlefield LLC, Atlanta, GA, for Defendants Jonathan Kalikow, WP Development Partners, LLC, Gamma Lending Omega, LLC, Gamma Real Estate Capital, LLC, GRE WP, LLC.

Henry D. Fellows, Jr., Michael Coleman Gretchen, Ethan M. Knott, Fellows La Briola, LLP, Atlanta, GA, Joseph Edward Hart, Florida Department of Economic Opportunity, Tallahassee, FL, for Defendant Blake Goodman.

ORDER

Timothy C. Batten, Sr., United States District Judge This case comes before the Court on Defendant Blake Goodman's motion [13] to dismiss the first amended complaint for failure to state a claim, as well as his motion [15] for oral argument. Also before the Court is the motion to transfer [14] filed by Defendants Jonathan Kalikow; WP Development Partners, LLC ("WPDP"); Gamma Lending Omega, LLC ("GLO"); Gamma Real Estate Capital, LLC ("Gamma"); and GRE WP, LLC ("GRE").

I. Background

There is a stretch of land in Frisco, Texas known as the $5 Billion Mile. Developments in that stretch include the Dallas Cowboys’ headquarters and training facilities, Toyota Stadium, and several mixed-use retail and residential projects.

Between 2012 and 2015, commercial real estate developer Stanley Thomas, acting through his corporate affiliates, acquired 176 acres of farmland along the $5 Billion Mile. Thomas designed a large, multi-use development that would include two office towers, five hotels, 2,400 residential housing units, and over one million square feet of retail space. The project, which was forecasted to exceed $2 billion in developed value, became known as Wade Park.

To fund the acquisitions, Thomas-affiliated entities obtained purchase mortgage loans from two commercial real estate lenders, non-parties Bridge Capital, LLC and BAMCAP Partners, LP.

The Wade Park development was later separated into two parcels: the north property and the south property. Non-party Lebanon 390WR, which is managed by Thomas, took title to the north property using the Bridge Capital loan. Plaintiff Wade Park Land, LLC ("WPL"), also managed by Thomas, took title to the south property using the BAMCAP loan.

The Bridge Capital loan to Lebanon and the BAMCAP loan to WPL were set to mature in 2017, but the project remained unfinished and Thomas required additional funding.

In October 2016, Defendant Gamma Real Estate Capital LLC ("Gamma") agreed to lend a Thomas-affiliated entity $196 million using a bridge loan (the "Gamma Bridge loan"). The Gamma Bridge loan was to be used to both complete construction on the Wade Park project and pay off the Bridge Capital loan. The terms of the loan mandated that Plaintiff Wade Park Land Holdings, LLC ("WPLH") and WPL (together, the "Wade Park Plaintiffs") share certain information with Gamma, including details about the development of Wade Park and Thomas's other properties—for instance, possible financing options, potential business partners, and internal projections about future value.

In November 2016, Thomas and Gamma agreed to change the terms of the Gamma Bridge loan. The loan amount was reduced to $139 million, and Gamma was given a second lien behind BAMCAP on the south property. Gamma and BAMCAP also entered into an intercreditor agreement that cross-collateralized and cross-defaulted the BAMCAP and Gamma Bridge loans.

In December 2016, Thomas and Gamma agreed to change the terms of the Gamma Bridge loan again. First, the loan amount was reduced to $83 million. Second, Defendants WPDP, GLO, GRE, and Gamma (collectively, the "Gamma Defendants") were given a 75 percent interest in a new entity, non-party Wade Park Ventures, LLC ("WPV"), which controlled the two entities—WPL and WPLH—with ownership of the north and south Wade Park properties. The Gamma Defendants would retain their 75 percent ownership stake in WPV absent repayment of the Gamma Bridge loan within 60 days of its maturity. In other words, the Gamma Defendants would own 75 percent of the Wade Park project unless the Gamma Bridge loan was repaid within 60 days.

Gamma and BAMCAP also entered into an intercreditor agreement giving Gamma the option to purchase the BAMCAP loan if WPL defaulted. The terms of this agreement also required that WPL get consent from Gamma before modifying the loan.

Construction continued.

In January 2018, the BAMCAP loan was set to mature. Thomas approached BAMCAP about a one-month extension, but in late January, Gamma withheld consent to the proposed modification of the loan. The BAMCAP loan matured, and WPL defaulted. Because of the November 2016 intercreditor agreement cross-defaulting the BAMCAP and Gamma Bridge loans, the Gamma Defendants were then able to declare default on the Gamma Bridge Loan as well.

Rather than face a foreclosure sale pursuant to the Gamma Bridge loan, WPL and WPLH subsequently entered into three forbearance agreements with the Gamma Defendants. As a term of these forbearance agreements, Thomas was required to inform the Gamma Defendants of his efforts to secure financing to pay the Gamma Bridge loan.

Thomas attempted to refinance the loans on three of his other properties to obtain the requisite cash for the Gamma Bridge loan, but the Gamma Defendants subsequently purchased the loans he attempted to refinance. The Gamma Defendants also spoke with two other prospective lenders with whom Thomas had spoken; the lenders later backed away from their initial interest in providing additional financing for the Wade Park project.

In March 2018, non-party Dan Cathy agreed to invest in Wade Park. Defendant Blake Goodman, an associate of Cathy's, was named manager for the project. He was also named manager of a holding company, non-party Fourth Quarter Properties XLIX ("FQP"), whose members include Thomas; Cathy; non-party Little Suwanee Holdings, LLC; and Goodman.

Effective in July 2018, FQP, Cathy, Thomas, WPL, WPLH, and non-party River's Rock Properties entered into a written joint venture agreement. Goodman signed the agreement as a manager of River's Rock.

Also in July, Gamma purchased the BAMCAP loan. It now owned all loans encumbering Wade Park. WPL and WPLH then entered into three more forbearance agreements with Gamma. Unlike the earlier forbearance agreements, which applied to the Gamma Bridge loan only, these agreements applied to the Gamma Bridge and BAMCAP loans.

On February 4, 2019, the sixth forbearance agreement was set to expire. Rather than enter into a seventh such agreement, WPH and WPLH entered into a deed-in-lieu-of-foreclosure agreement with the Gamma Defendants. Gamma would receive deeds to the north and south Wade Park properties but would hold them in escrow, provided that WPL and WPLH made certain payments. They also agreed to a six-week written buy-back agreement during which time Gamma would permit Thomas to buy back the north and south Wade Park properties by paying off the loans.

In April 2019, the buy-back period expired without Thomas having paid off the loans, and Gamma recorded the deeds to Wade Park.

On August 26, 2020, the Wade Park plaintiffs each filed for relief pursuant to Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Georgia. The following day, this suit was filed.

Plaintiffs assert fourteen counts against Defendants: declaratory judgment (Count I); violation of federal and Georgia Racketeer Influenced and Corrupt Organizations ("RICO") statutes (Counts II-V); fraud (Count VI); tortious interference with business relations (Count VII); breach of contract (Count VIII); unjust enrichment (Count IX); usury (Count X); avoidance, preservation and return of constructively fraudulent transfers (Count XI); avoidance, preservation and return of constructively voidable transfers (Count XII); punitive damages (Count XIII); and attorneys’ fees and costs (Count XIV).

Although this suit was initially referred to the Bankruptcy Court for the Northern District of Georgia, on September 23 Defendants moved [1] to withdraw the reference to the bankruptcy court and litigate this suit in the Northern District of Georgia. That motion was granted [4] on October 14. On October 16, Plaintiffs amended [5] their complaint.

On November 13, Goodman moved [13] to dismiss the amended complaint for failure to state a claim. That same day, the remaining Defendants separately moved [16] to dismiss and moved [14] to transfer this case to the Southern District of New York. Goodman later responded [18] to the motion to transfer.

On December 11, Plaintiffs responded [20, 21] to the motions to dismiss and responded [22] to the motion to transfer. Goodman later replied [25], as did the remaining Defendants [27, 28].

Now, the motions having ripened for review, the Court enters the following order.

II. Goodman's Motion to Dismiss¹

A. Legal Standard

To survive a 12(b)(6) motion, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 547, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; see also Chandler v....