P.M. BRIEFING : $20 Million Fuels Fla. Battle
Florida’s largest development company paid more than $20 million in legal fees to defend against charges of fraud rather than settle customer complaints, it was reported today.
The Miami Herald said that even as a grand jury was indicting the firm, the board of the General Development Corp. approved spending $22.58 million to fight its legal battles and $800,000 each in salaries, bonuses and severance payments to two former executives who later pleaded guilty to participating in a fraud.
“Incredible. Just incredible,” said New York investor Attilio F. Petrocelli, GDC’s largest shareholder. “We’re not happy about it.”
“Oh, my God,” said Miami lawyer Douglas S. Lyons, who represents dissatisfied GDC customers. “That $22 million could have gone a long way toward settling the cases. Then it would have gone to clients instead of lawyers.”
The disclosures were obtained by The Herald from financial statements filed by GDC in U.S. Bankruptcy Court in Miami.