Thursday, May 6, 2010
White, Floyd sue over failed project
NEWARK, N.J. -- Former major leaguers Rondell White and Cliff Floyd have filed a $12.5 million lawsuit in federal court against two New Jersey financial advisers, alleging they lost millions of dollars in a real estate development deal.
The lawsuit against Steven Kolinsky and Stephan Hill of the Kolinsky-Hill Financial Group alleges federal securities fraud and misrepresentation, breach of fiduciary duty and civil conspiracy to defraud, among other claims.
A statement by Kolinsky and Hill called the lawsuit untrue and reckless.
The suit alleges that the players and White's wife, Zanovia, lost a combined $2.5 million investment in Hackensack Park Plaza LLC, a real estate development company formed in 2007 as an investment vehicle to purchase a seven-acre parcel in Hackensack.
The investment was fraudulently characterized to the players as guaranteed to result in the full return of the investors money back within six months, together with substantial profits, the suit alleges. It seeks up to $12.25 million in compensatory, punitive and exemplary damages.
"The allegations made by Rondell White and Cliff Floyd in their lawsuit are untrue and reckless," the defendants said in a statement issued Thursday, noting they made no misrepresentations and no guarantees to any investor.
The financial advisers said the players knew the risk associated with the investment and signed a statement acknowledging as much.
"This real estate project, like so many others in the last two years, lost substantial value because of the general downturn in the economy and, specifically, the residential housing market," the financial advisers said.
"All investors, including Messrs. Kolinsky and Hill, lost money," the statement continued. "Messrs. Kolinsky and Hill received no management fees or any other form of compensation. The lawsuit filed by White and Floyd ignores these facts and makes reckless and unfounded allegations."
The complaint reflects that other present and former major league players -- also represented by Kolinsky and Hill -- invested at about the same time in 2007, including David Wright, Jason Marquis, Todd Hundley and Gregg Jefferies.