Wegmans and Target opened to much fanfare at Uptown Worthington but the battle rages behind the scenes between the property’s developer Brian O’Neill and Citizens Bank.
This story has all the trappings of a made-for-TV movie drama. The “man-versus-man” plot features a central character (Brian O’Neill) and an opposition character (Citizens Bank) as the primary actors. The central character has a goal and the opposition is going to attempt to stop the central character before he obtains the goal.
The latest chapter in the continuing saga of the mega-million dollar lawsuit and countersuit between O’Neill Properties and Citizen Bank has attorneys for the bank accusing Brian O’Neill of harassment against five of the bank’s top execs. O’Neill counters the accusations; claiming that the bank destroyed evidence and lodges obstruction of justice allegations.
This week Brian O’Neill and Citizens Bank are headed back to court . . . once again, the courtroom becomes the legal playground for attorneys on both sides. As the war wages on between developer and bank, the $700 million Uptown Worthington project on 106 acres sits largely unfinished. Reportedly, O’Neill Properties is feeling the effect of the recession – the payroll has dropped 50%, down from 150 employees to 75 over the last couple of years.
O’Neill’s battle with Citizens Bank is not confined to the Uptown Worthington project. The developer-bank entanglement also includes a 100-acre corporate park in Bensalem and a 400-acre residential development in North Jersey. Much like a high-profile divorce is the split between O’Neill and Citizens. For eight years, they enjoyed a good relationship with the bank offering $180 million in financing to O’Neill Properties. The economic crisis hit . . . the bank wanting to lessen their financial risk pulled out of their deal with O’Neill Properties, which left the developer without a parachute. Rather than sit on the sidelines and accept his fate, Brian O’Neill is fighting back hard and I don’t think Citizens Bank was quite prepared for their formidable opponent!
This would make a great made-for-TV movie if it were not playing out in our own backyard!
If you recall, I have had several posts about Brian O’Neill of O’Neill Properties in regards to his Uptown Worthington project in Malvern (future site of Wegmans). Citizens Bank had secured a $61 million judgment against O’Neill in November for unpaid loans on the project.
Breaking news . . . Mr. O’Neill is taking back the ball to his side of the court. He has filed a lawsuit against Citizens Bank for $8 billion in damages ($4 billion in compensatory damages and $4 billion in punitive damages), claiming that the bank wrongly called for loans before they were due and the bank did not follow through with their end of the agreement with construction financing.
The O’Neill lawsuit alleges that Citizens Bank judgment was “maliciously based upon sham defaults manufactured by the bank in bad faith — as part of a scheme to pressure”. I am guessing that Citizens Bank tried to back O’Neill in to a corner with their demand to repay the loans. O’Neill’s lawsuit points to a couple of major problems with Citizens Bank. First, the bank was demanding repayment on the financing loans before the loans were scheduled to be due; and secondly, Citizens induced O’Neill to amend the initial loan agreements and increase the amount borrowed when they had no intention of doing so.
After Citizens Bank secured its judgment against O’Neill (in essence leaving the Worthington project without promised financing as the lead lender), O’Neill has been challenged in his efforts to find other financing. Without Citizens Bank’s financing, O’Neill has faced great difficulty in restructuring the financing required for the Worthington project. We are acutely aware that the economic climate is far different now than it was in 2002 when Brian O’Neill and O’Neill Properties began this major redevelopment project in Malvern, making this current financial situation all the more difficult for both sides. Because of Citizens Banks actions, O’Neill alleges that he has lost not only tenants but also damages to his company far exceeding the $61 million loan amount. As a result, O’Neill is seeking damages of $8 billion from Citizens Bank.
If you are keeping score, looks like the ball is in O’Neill’s court. Citizens Bank, you are up next . . .