Proposed railyard film studio land is mired in lawsuits

By Dennis Domrzalski - New Mexico Business Weekly

February 21, 2005

First lawsuit
The legal battle was launched on April 28, 2004 when Maron filed a breach of contract lawsuit against the Urban Council and others involved in the deal in U.S. District Court. The suit claims, among other things, that Maron bought out the original underwriters of Los Alamos National Bank's mortgage to the Urban Council and that he is owed $1.1 million in connection with the Urban Council's default.

The lawsuit also says that the Urban Council reneged on a Sept. 5, 2003 agreement with Maron to buy the 27 acres and that the Urban Council improperly kept the $250,000 payment that Maron and his company, MRN Limited Partnership, made as a first installment on the purchase agreement.

The Urban Council's court documents say that Maron failed to close on the property and that the organization legally kept his $250,000.

In addition, the lawsuit says that Maron made three other loans totaling $160,000 to the Urban Council that the organization has not repaid. The complaint seeks $1.5 million in damages from the Urban Council.

Casebier says that after Maron bought out the original underwriters to the Urban Council's $2.5 million mortgage with Los Alamos National Bank, he had the right of first refusal on the property. But when Renaissance offered to buy the land from the Urban Council in 2004, Maron refused to exercise that right and instead filed a lawsuit. Maron is apparently hoping to recover the $250,000 from the Urban Council, Casebier says

"He did this, in our opinion, because he heard of the pending transaction with Digital Media Group," Casebier says. "Instead of waiving his right of first refusal or accepting a substitute purchase on the property, he filed suit for what he was legitimately owed under the underwriters agreement, and also for various money that he forfeited when he failed to close, plus other claims that we assert have no validity."

Maron's attorney, William Keleher, says he had no comment on the court battles or on Casebier's comments.

Counterclaims
Shortly after Maron filed his suit, the counterclaims started flying. Los Alamos National Bank charges in its court documents that it has first position in the line of creditors to whom the Urban Council owes money. It also says that the Council violated the original mortgage agreement by incurring other debts without the bank's approval.

"Under the agreement, Urban Council covenanted to Los Alamos that it would not 'create, assume, or incur any indebtedness' regarding the property without approval in writing from Los Alamos," the bank's counterclaim says. The "Urban Council incurred debts and liens against the property without Los Alamos' approval, to Renaissance and Old Locomotive."

Urban Council President Ron Ashcraft did not return phone calls seeking comments for the story.

Renaissance Development Company and Old Locomotive Shops filed a counterclaim against some of the original underwriters of the Urban Council's $2.5 million loan, claiming that it has a valid lien against the property by virtue of the $30,000 loan it made to the Urban Council on June 1, 2004, and of the $4.7 million line of credit that it has given the Urban Council under a financial restructuring agreement. That line of credit was secured with a mortgage on the railyard property. Old Locomotive has advanced the Urban Council $175,000 under that line of credit, court filings say.

The Urban Council is in default on both of those loans, court documents say.

Casebier says that Renaissance has unsuccessfully tried to settle the case with Maron. But even if Maron's lawsuit doesn't disappear, Renaissance can still move forward with plans to buy and develop the property, Casebier says.

"We would just post with the court a bond in the amount that he claims he is owed," Casebier says. "We can either resolve Maron's claim or bond around it."

ddomrzalski@bizjournals.com | 348-8322.