Stan Kroenke’s ex-business partner files lawsuit claiming breach of fiduciary duty by Kroenke and his attorney in land deal.
Michael Staenberg, a former business partner of Stan Kroenke, alleges he is being wrongly excluded from the St. Louis Ram’s owner’s 200 acre Maryland Heights development project. In a lawsuit filed Monday in St. Louis County Circuit Court, Staenberg said he and Kroenke in 2008 or 2009 began exploring a retail and real estate development opportunity at the site, west of Interstate 270 and east of the Missouri River, on the north and south side of Page Avenue.
Staenberg said their company, Maryland Commons Development LLC, entered into contracts with land owners at the site. Work on the project also included engagement of a real estate broker, execution of purchase and sale agreements, and meetings with Maryland Heights officials, Staenberg said. It all cost money, he said.
Kroenke attorney Alan Bornstein was also an organizer of Maryland Commons Development, according to the suit. But Bornstein is now pursuing the site for himself and Kroenke, through UTW Realty LLC.
The lawsuit said that Kroenke and Bornstein utilized the same real estate broker used by Maryland Commons Development, and that the property UTW Realty has under contract — the Knobbe Family’s property in the Howard Bend District — was included in Maryland Commons Development’s original due diligence.
Staenberg said Kroenke and Bornstein have “breached their fiduciary duties to (Maryland Commons Development) by stealing and usurping (Maryland Commons Development’s) business opportunities and engaging in self-dealing.”
He demands a jury trial and damages totaling more than $5 million. Staenberg is represented by Gary Sarachan of Capes, Sokol, Goodman & Sarachan P.C.
Bornstein and a Kroenke spokeswoman did not immediately respond to requests for comment.
Kroenke and Staenberg have for years been involved in litigation over their THF Realty partnership.
A court this year ruled that Staenberg must buy Kroenke’s share in two Rochester entities. Staenberg did so, at a price of more than $20 million, Sarachan said.
Other counts in that case are scheduled for an Aug. 29, 2016, trial.
Some include Staenberg’s claim that Kroenke didn’t pay a $1.54 million invoice for customization of his luxury condo in a Clayton high-rise the partners built, and blocked Staenberg’s bid to buy in that building, the Plaza. Staenberg also claimed Kroenke withheld payment of $3.3 million in leasing commissions and development fees owed to THF Realty.
Kroenke has said in court documents that Staenberg has been paid a total of $110 million since December 2011 for his stakes not only in THF Realty and THF Management but also more than 70 other THF entities. THF was founded in 1991.
Staenberg filed another suit in March, alleging that Kroenke, a billionaire who owns the St. Louis Rams, has failed to use money from a Montrose, Colorado, development for another project, as mandated by a 2010 operating agreement. That case is pending.
Originally posted by Jacob Kirn on the online version of the St. Louis Business Journal.
Breach of Fiduciary Duty Representation – Ball & Bonholtzer Trial Attorney – Los Angeles