Development deal gone sour triggers long legal odyssey
When the old Fairwood Country Club went up for auction in 2005, developer Windy Gladney sensed opportunity. With 110 acres of prime real estate situated at the busy intersection of Interstate 12 and Millerville Road, Gladney envisioned a subdivision and shopping center in one of the Capital Region's fastest-growing areas. "I stood on that property one morning with a cup of coffee and watched some of those 70,000 cars a day that pass by on I-12," Gladney recalls. "That's when I decided to make a bid on it." It may have seemed like a good business decision at the time. But seven years later, the project has yet to get off the ground, and Gladney is potentially on the hook for $2 million. In the meantime, he has become embroiled in a contentious legal battle with fellow developer Jim Tanner, his former partner in a limited liability company called Kleinpeter Trace, and with BancorpSouth, which he claims conspired with Tanner by allowing the developer to use Kleinpeter Trace funds to pay off an undercollateralized, separate, real estate loan Tanner had with the bank. The allegations make for compelling reading. In part that's because the case centers on Tanner, one of the city's better-known developers, who became overextended and fell on hard times, leaving a string of creditors and former business partners holding the bag. In part, it's because Gladney's charges of lender liability against BancorpSouth are egregious and, if proven true, could suggest criminal wrongdoing, banking experts say. Read the complete cover story of the new issue of Business Report by Editor Stephanie Riegel here.
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