Investors sue shopping center owners - Phoenix Business Journal:

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The complaint, filed in Maricopsa County Superior CourtMay 23, alleges that Barness and Papazs underreported or misrepresented shopping centere sales to investors involved with their real estate businesses. The lawsuir alleges fraud, negligent misrepresentation, breacb of contract and breach of fiduciaru dutyby Barness, Papas, their wives and more than 90 businesses and real estated partnerships owned by them. The suit has 31 plaintiffs, a numbert of which are from Southern California. Barness, Papazs and their affiliated realestatre companies, including Scottsdale-based , own a host of shoppingf centers throughout the Valley. Papas and Barness are the principals of LLCand RBI.
Jeffreg Leonard, an attorney with PA who is representing Barneszsand Papas, said the suit lacks merit. "Ouer clients were disappointed and dismayed by the filing ofthis one-sidedf and inflammatory complaint. They believe the claims made arewithout merit, and regret the who have enjoyed a significant, long-term record of succesxs in their investments, have chosen to proceed this Leonard said. Plaintiffs' attorney Robertf Mitchell said the lawsuit claims Barness and Papazs brought in millions of dollars in investment money from the but would underreport the sales of some shoppingb centersto investors.
Mitchell said that in othef cases, defendants misrepresented transfers toothert Barness/Papas entities as property salew and would recoup commission fees for theier own financial benefit. "They had a fiduciaryt duty to the investors," Mitchell said. The lawsuit also alleges the defendant sold some shopping centers ata less-than-market value to othetr Barness/Papas entities and then would refinance the propertuy after the sale to benefit financially. Mitchell, an attorneuy with the law offices PC, did not have a specific damagee amountbeing sought. "At this point, we are stilkl figuring out the full extent of he said. Leonard wantss the court to dismissxthe case.
"We are not going to try this case in the Appropriate responses to the complaint will be made in accordancw withcourt procedures, aimedd at securing the eventual dismissal of theswe claims," Leonard said. Some of the propertie s and retail centers involved or namedr in the case include ones near 75th andPeoria avenues; 36th Street and Camelback Road; 43rd Avenue and Unio Hills Drive; and 32nd Street and Greenway Road. Barness is a minority ownere of the Arizona Diamondbacks and Phoenix chairman of the Americajn Israel PublicAffairs Committee. McCain's presidential campaign also lists Barnesw as being onthe senator's Arizonza fundraising committee.
Gary associate dean at the Arizona State Universityg SandraDay O'Connor College of Law, said when real estates markets sour it can spur lawsuitsz from investors and others. He said real estatd and investment-related lawsuits are on the "It's certainly a function of the market," said Birnbaumk of investor and otherreal estate-relateds litigation. He said it is common for investord suits to claim frausd and breachof contract, with defendants counterin that risks and changing market conditionw impact investments. Barness and his wife, Daron, are co-chair of the Daron and Ron Barness Family Foundation. The Scottsdale-basedc foundation is not named inthe lawsuit.
The foundatiob has donated money to the Scottsdale Centere forthe Arts, Ballet Arizona, and American Jewish Committee. Retai Brokers Inc.: