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Harbor Court developers sue Mitsui and others for failure to fund loan.

HONOLULU--(BUSINESS WIRE)--Jan. 5, 1995--Japan's Mitsui Trust and Banking Co. Ltd. was sued Thursday in Hawaii State Court by the developer of an office-residential complex in downtown Honolulu.

The suit resulted from the failure of Mitsui Bank, the leader lender, to make the final loan payments on the Harbor Court project.

In the lender liability lawsuit, filed in State Circuit Court today, the developer, Harbor Court Developers, alleges that Mitsui Trust and the other lenders have obstructed the progress and operation of the development for some time. The suit charges that the lenders "abusively delayed approvals," incurred "large and unwarranted fees for attorneys, accountants and other consultants," and have "given approvals, then withdrawn approvals or otherwise given contradictory instructions."

The suit also charges that "Defendants Lenders interfered with, controlled and substituted their judgement for Plaintiff Harbor Court Developers judgement for business decisions about the project, including, but not limited to, residential sales prices, commercial lease rents and terms, selection of tenants and types and amounts of and tenant improvements."

As a result of these actions, the developer has not been able to pay over $600,000 due in ground lease rents to the City and County of Honolulu and other vendors for services essential to the operation of the project.

The lawsuit also cites the fact that the lead lender, Mitsui Trust, "has a history and pattern of making loans for developments in Hawaii which ultimately result in failed projects and loss of investor equity." Mitsui Trust is the lender to the nearly empty Landmark Project at the gateway to Waikiki.

In seeking damages, the suit calls the lenders' breach of the construction loan "wanton and/or reckless as to the result in a tortious injury to the plaintiffs." Specifically, the suit says, "Mitsui Bank engaged in oppressive and unscrupulous practices that constitute an unfair method of competition."

As might be expected, the plaintiffs in the suit are asking for damages "in amounts to be proven at trial."

Plaintiffs in the case are the developer, Harbor Court Developers, and its general partner, The Beam Harbor Venture. Defendants are lead lender The Mitsui Trust & Banking Co. Ltd., and other lenders, Sanshin (USA) Inc., NED Delaware Co. Ltd., Kawasaki Leasing International Inc., NK Leasing (U.S.A.) Inc., Mitsui Leasing (U.S.A.) Inc., Nittetsu Leasing (N.Y.) Inc., and Sumisho Leasing Corp. of America.

Most of the defendants are U.S. branches of Japan-headquartered corporations.

CONTACT: McCormack Properties Ltd.

Scott McCormack, 808/539-9616
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Publication:Business Wire
Date:Jan 5, 1995
Words:413
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