Marina del Rey Investors Charge Fraud
A group of wealthy Saudi Arabian investors have filed suit to dissolve their partnership with Marina del Rey’s biggest developer, accusing Abraham M. Lurie of engaging in fraud since selling them a 49.9% stake in his extensive Marina holdings nearly two years ago.
The lawsuit filed last week in Los Angeles Superior Court seeks a court order to liquidate the partnership and appoint the Saudi investor group as receiver of Lurie’s properties, which make up nearly one-fifth of the Marina.
The legal action appears to mark the end of a deal disclosed last November that would have given the Saudi investors--headed by billionaire businessman Abdul Aziz Al-Ibrahim, brother-in-law of Saudi Arabia’s King Fahd--the remaining 50.1% stake in Lurie’s Marina holdings.
Lurie is the largest single leaseholder at the county-owned Marina. Though businesses at the Marina sit on public land, they operate on long-term leases that can be bought and sold like conventional real estate.
Through his companies, Lurie controls 60-year leases on three hotels, two apartment complexes, office buildings, shopping centers, restaurants, and more than 1,000 boat slips, as well as the last undeveloped parcel of Marina land.
Lurie was not available for comment Monday. But his attorney, Stephen Claman, said the “allegations in the complaint are pretty garden-variety--fraud and breach of fiduciary duty.”
After reviewing the lawsuit, Claman said in an interview, it is clear the investors, known as the Marina Group of Companies, “don’t want to be Abe’s partner any more. One way or another it (the breakup) is going to happen.”
It was also learned Monday that Lurie, whose Marina holdings are heavily mortgaged, has stopped making some loan payments. As a result, two banks have initiated foreclosure proceedings against him in recent days for failing to make nearly $1.5 million in loan payments.
The new round of default notices recorded last week marks the second time since last summer that California Federal Bank and Great Western Bank have begun foreclosure proceedings against Lurie. He narrowly avoided a foreclosure sale on his Marina properties last fall after his Saudi partners stepped in at the last minute and made the delinquent payments.
In their lawsuit, attorneys for the Saudi investors, who operate through a series of companies based in Century City, allege that Lurie willfully ignored the financial requirements of their partnership.
Attorneys for the investors contend that Lurie and his company, Real Property Management Inc., have engaged in “fraud and abuse,” including diverting or misapplying funds and failing to provide accounting and financial records.
The investors asked for a court order appointing them receivers to take over all of the partnership’s property, including the Marina Beach, Marina del Rey and Marina International hotels, the Islander Marina and Admiralty apartments, Fisherman’s Village, Pier 44, the Marina Beach Shopping Center, Marina West office building and the undeveloped marina land.
