Newport Capital Advisors is awarded more than $50 million by jury
A jury has ordered an investment management firm to pay more than $50 million in damages to its partner in four Hollywood real estate projects, including a renovation of the landmark Hollywood Palladium concert hall.
Newport Capital Advisors had accused money manager Commonfund of reneging on an agreement to partner in the construction and renovation of office, hotel, condominium and retail properties.
A jury in Los Angeles County Superior Court ordered four Commonfund subsidiaries to pay $16.3 million in compensatory damages and $34 million in punitive damages to the Orange County firm.
Commonfund is the nation’s largest investment manager for nonprofit entities. The Connecticut firm manages more than $25 billion for colleges, foundations, hospitals and other nonprofit organizations.
Keith Luke, managing director for Commonfund, said the firm “vigorously disputes the verdict.”
“There is no basis for either the verdict or the magnitude of the judgment,” Luke said in a statement. “The verdict is not supported by the facts or evidence in the case, and we are considering an appeal.”
Newport Capital Advisors’ attorneys said the Orange County company had reached an agreement to co-own and develop the Hollywood properties in 2004. The firm accused Commonfund of hatching a “secret plan” to bring in a new developer and claim sole ownership of the properties.
“We were pleased with the thoughtful and decisive verdict by the jury,” said Wayne Gross, an attorney for Newport Capital.
All four projects stalled after the real estate and financial markets collapsed in 2008. The Palladium is under receivership, and another property was foreclosed. Commonfund owns two other properties, said Alan Greenberg, a lawyer for Newport Capital.
