B-CU finger-pointing begins

Developer demands millions; Jackson, Lucas respond

CHARLES W. CHERRY II / FLORIDA COURIER
The legal back-and-forth about Bethune-Cookman University’s $300 million dormitory construction project is now underway.
BY THE FLORIDA COURIER STAFF

DAYTONA BEACH – This week, three of the defendants in the Bethune-Cookman University (B-CU) lawsuit filed responses to the legal action.

Last month, the school sued its former president, Dr. Edison Jackson; its former Chief Financial Officer Emmanuel Gonsalves; its former vice president of Institutional Advancement, Dr. Hakim Lucas; Maryland-based real estate developer Darnell Dailey; and Orlando-based consultant Mark Glover, over what the lawsuit calls “The Ill-Conceived Dormitory Project” that could cost the school millions of dollars.

No evidence
In an almost identical response filed by the same attorney, Carlos J. Burruezo of Orlando, Jackson and Lucas claim that B-CU’s lawsuit should be dismissed by Circuit Court Judge Christopher A. France for failure to state a cause of action, and failure to sue the necessary parties.

Jackson and Lucas state that B-CU’s legal complaint contains no proof that either of them did anything wrong.

“The section of BCU’s Complaint, captioned “The Improper Payment Made to B- CU Officials”…does not actually delineate improper payments,” their response states. “Instead, this section suggests improper payments ‘upon information and belief.’

“However, where is evidence of payment? Where is the wire transfer? Where is the cancelled check? B-CU has not attached any such support because there is none.”

Attacks Grimes, Dudley
The response takes particular aim at B-CU’s current Interim President Hugh Grimes – himself a former circuit court judge and now a practicing attorney – and current General Counsel Sharon Dudley.

“Surely, before filing claims for civil remedies for violations of criminal law, breach-of-fiduciary-duty, and fraud, BC-U – headed by two lawyers – would have conducted some degree of due diligence and found evidence to support its claims – i.e., e-mails, text messages, fund transfers, and other financial documents. The fact it did not leads to the conclusion that it cannot.”

The response calls Grimes and Dudley “material witnesses” in the case, and alleges that Dudley operates “under a conflict of interest, especially since she is driving the instant litigation on behalf of B-CU. She is taking a position adverse to former clients in connection with the same transaction.”

The response also calls for everyone associated with the dorm deal to be joined into the lawsuit.

“Mr. Grimes, Ms. Dudley, members of the Board of Trustees, law firms, accounting firms, and consulting firms, had direct roles in either negotiating, evaluating, or approving the dorm project in question,” it alleges.

It also claims that Jackson or Lucas “could not have moved forward with the project without the consideration, analysis and approval of these other parties.”

Board ‘ignoramuses’?
B-CU’s allegation that Jackson and Lucas bamboozled the university’s board into signing off on a bad deal was also ridiculed.

“The B-CU Board of Trustees at the time was compromised of a wide array of accomplished professionals from myriad disciplines – legal, accounting, business, insurance, governmental and philanthropic. The dorm project was fully reviewed by the Board of Trustees, and outside consultants, including but not limited to law and accounting firms,” the response states.

“The notion that the Defendants in this cause conspired with each other and duped these accomplished professionals belies logic and crosses the threshold of absurdity. Are they really intending the public and this Court to believe that they were that ill-informed and that each in their own right is an ignoramus?

“Each of these additional persons and entities likewise had fiduciary duties to B-CU, and were obligated to faithfully discharge those duties. If (Jackson and Lucas) failed in their duties, these others, by extension, must have failed as well.”

Counterclaim for cash
In the same lawsuit, teal estate developer Darnell Dailey is countersuing B-CU to get millions of dollars in dormitory rent he claims B-CU owes to his company, Quantum Equity BCU LLC, under the terms of a sublease agreement the university signed. He claims that B-CU filed the lawsuit as a smokescreen.

“…(B-CU) initiated this litigation to create a justification for its ongoing defaults under the Sublease, to put pressure on (Quantum) to agree to restructure the Sublease, and to divert attention from other well-publicized issues facing (B-CU),” the counterclaim states.

Late payments
According to Dailey’s counterclaim, B-CU was to start making monthly payment of $477,050 from January to December 2017. He claims B-CU’s monthly payments were consistently late, and that the university failed to make a $954,206 payment due in January 2018.

Dailey also claims that B-CU’s late payments are a violation of the signed agreements that allows him to demand all the monthly payments be paid to his company immediately in a lump sum.

According to the documents attached to the lawsuit, B-CU on the hook for 38 years – until the year 2055. That’s approximately 456 monthly payments ranging from a minimum of $477,000 per month to a maximum of $840,000 per month.

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