Lofts owner, investors file suit

Libby Lofts, a company once tasked with

renovating the old Libby high school building into condominiums,

filed suit in the 19th Judicial District Court this past August

accusing three of its investors of sabotaging efforts to raise

money for the project.

In response, the three defendants are

countersuing, claiming that Libby Lofts’ manager and sole owner,

Scott Curry, misappropriated their investment and intentionally

failed to disclose the financial condition of Libby Lofts when they

agreed to invest.

William and Penni Riggles entered into

an investment agreement with Libby Lofts in August 2008. Ron Carter

signed an agreement in February 2008.

Curry said he filed suit on behalf of

the remaining Libby Lofts investors after receiving a demand letter

from the defendants’ attorney. Curry claims the legal document

“demanded ownership of everything,” including the land, equipment

and designs “in exchange for the small amounts that they claim

they’re owed.”

Curry’s counsel did not return calls to

provide a copy of the document, and defendant Ron Carter declined

to discuss the contents of the letter or supply a copy. Penni

Riggles did not want to speak about the lawsuit, and the

defendants’ attorney didn’t immediately respond to a voicemail.

Though Carter said it wasn’t proper for

him to comment about ongoing litigation, in reference to the demand

letter, he said, “We were trying to solve it informally, but we

weren’t able to.”

The brick building on East Lincoln

Boulevard, originally built in 1917, appeared to be on its way

toward transformation into condos when project manager and

co-owner, Eric Berry, died in May 2008 in a motorcycle crash. The

project was his vision, and he owned roughly two-thirds of the

company.

Curry, Libby Lofts co-owner, told The

Western News in August 2008 that he expected the project to be

completed by early 2009. Renovations were stalled, however, as

Berry’s estate went through probate and investor interest waned,

Curry said.

“The judge didn’t make a (prompt)

decision of who was to own Libby Lofts,” Curry said. “… It got to a

point where people involved with Libby Lofts didn’t want to put

money into it.”

The matter was not resolved until July

2009, Curry said. Since becoming sole owner, he has changed course,

deciding to build senior apartments instead of condos and

commercial spaces.

“We’re trying to change the project

from condos for sale to senior apartments for rent, which may be

some of the basis for the arguing,” he said.

Though the modification caused some to

drop out of the Libby Lofts venture, Curry said, there are still

“quite a few that are continuing to stay with the project.”

The Riggles entered an agreement with

Libby Lofts on Aug. 10, 2008, three months after Berry’s death, in

which they invested $11,490 toward a future condo in the finished

building. The contract stated that the unit was scheduled to be

ready for occupancy on or before the fall of 2009. In exchange for

the cash investment, the couple reserved the unit and was to

receive a 5-percent discount off the condo’s total price of

$114,900.

Carter agreed on Feb. 1, 2008 to invest

an equivalent of $25,000 in labor into the building as an

independent contractor at a rate of $20 per hour plus interest. The

investment could be paid back in the form of cash or space in the

finished building, the agreement stated.

The contracts laid out the risks

involved in investing, such as “loss of monies, project delays,

dilution of investment and other unforeseeable situations.”

Curry accused the defendants of

breaching their contracts by acting in bad faith. He claims that

they attacked his credibility and the project’s viability, caused

investors to withdraw from participation, and attempted to force

him, through extortion, to reveal all of his assets. Additionally,

Curry charged Carter with falsifying information on timecards in

order to obtain more money.

Because of their alleged behavior,

Curry requested that the court declare that Libby Lofts be excused

from the terms of the contracts and, additionally, grant a jury

trial to determine if the company is entitled to compensatory and

punitive damages. Lost time, the claim states, has led to lost

money due to maintenance costs, property taxes and insurance.

Carter and the Riggles responded to the

lawsuit in September with a counterclaim that was amended in

November to include more information. The defendants allege that

Curry intentionally deceived them by stating that their investment

would fund the renovation of the old high school and they would, in

return, obtain space in the building or interest on their

investment.

“Mr. Curry failed to disclose to either

the Riggles or Carter that his real purpose for entering into the

Riggles Investment Contract and the Carter Investment Contract was

to improperly divert funds from the project to Mr. Curry

personally,” the claim reads.

The defendants accuse Curry of keeping

them in the dark about the financial condition of the company, an

alleged violation of their contracts. They claim they haven’t

spoken to Curry in about a year-and-a-half, “during which time

little if any work has been done on the project.”

In addition, they accuse Curry of

paying himself 40 hours per week with Libby Lofts funds without

performing the proportionate amount of work during an approximately

one-year period prior to Nov. 12, 2008.

Curry denies the allegations and says

the project will continue on.

“Libby Lofts is moving forward with

developing a senior living complex out of the old high school

regardless of what is going on with the litigation,” he said.