Investors sue shopping center owners - Phoenix Business Journal:

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The complaint, filed in Maricopa County Superioe CourtMay 23, alleges that Barneses and Papas underreported or misrepresentec shopping center sales to investors involved with their real estate businesses. The lawsuit alleges negligent misrepresentation, breach of contract and breach of fiduciary dutyby Barness, Papas, their wivese and more than 90 businesses and real estate partnershipd owned by them. The suit has 31 plaintiffs, a numbe r of which are from Southern California. Papas and their affiliated real estate including Scottsdale-based , own a host of shopping centerws throughout the Valley. Papas and Barness are the principals of LLCand RBI.
Jeffrey an attorney with PA who is representing Barness and Papas, said the suit lacks "Our clients were disappointed and dismayed by the filing of this one-side d and inflammatory complaint. They believe the claims made arewithouft merit, and regret the plaintiffs, who have enjoyed a significant, long-term record of success in their have chosen to proceed this way," Leonarx said. Plaintiffs' attorney Robert Mitchelkl said the lawsuit claims Barnessd and Papas brought in millions of dollars in investmengt money fromthe plaintiffs, but wouldx underreport the sales of some shopping centerxs to investors.
Mitchell said that in other defendants misrepresented transfers toother Barness/Papas entitiea as property sales and would recoup commission fees for their own financial benefit. "They had a fiduciaruy duty to the investors," Mitchell The lawsuit also alleges the defendantx sold some shopping centers ata less-than-market valu to other Barness/Papas entities and then woulfd refinance the property after the sale to benefig financially. Mitchell, an attorney with the law offices PC, did not have a specifix damage amountbeing sought. "At this point, we are stilll figuring out the full extent of he said. Leonard wants the court to dismissxthe case.
"We are not goingb to try this case in the Appropriate responses to the complaint will be made in accordanc withcourt procedures, aime d at securing the eventual dismissal of thesr claims," Leonard said. Some of the properties and retail centersa involved or named in the case include ones near 75th andPeoria avenues; 36th Street and Camelbackj Road; 43rd Avenue and Union Hills Drive; and 32nd Streey and Greenway Road. Barnesw is a minority owner of the Arizonaw Diamondbacks and Phoenix chairman of the American Israelk PublicAffairs Committee. McCain's presidentiao campaign also lists Barness as being onthe senator's Arizonqa fundraising committee.
Gary Birnbaum, associate dean at the Arizona State University SandraDay O'Connor College of Law, said when real estate markets sour it can spur lawsuitsd from investors and He said real estate and investment-related lawsuits are on the "It's certainly a function of the market," said Birnbaumk of investor and other real estate-relate litigation. He said it is common for investod suits to claim fraud and breachhof contract, with defendants counterinyg that risks and changing markey conditions impact investments. Barnesws and his wife, Daron, are co-chairse of the Daron and Ron BarneswsFamily Foundation.
The Scottsdale-basedc foundation is not named in the The foundation has donated money to the Scottsdale Cented forthe Arts, Ballet Arizona, and American Jewish Retail Brokers Inc.: