Lennar Corp conspiracy headed up by CEO Stuart Miller
This week the Fraud Discovery Institute and Barry Minkow released a new (and yes, shocking!) report about a conspiracy involving Lennar Corp. (NYSE:LEN), and spearheded by CEO Stuart Miller and two of the company’s top executives.
Check this out…
Lennar has been involved in litigation with Nicolas Marsch, the guy who spend ten years helping Lennar make The Bridges one of the company’s most successful real estate ventures ever. The project grossed half a billion dollars in revenue during the biggest real estate boom this country has seen. Yet mysteriously, Lennar doesn’t want to pay Marsch his half of the profits from the venture.
So instead of paying Marsch the hundred million dollars (or two) that he’s entitled to, Marsch says Lennar cooked the books to make it appear as if The Bridges lost money. If there are no profits, there’s no payout….
Litigation of this matter has been going on for a couple of years, and Lennar apparently has been employing a Survivor-like strategy of “Outwit, Outplay, Outlast.” The company has spent something on the order of $30 million (probably more) to litigate, and is hoping that Marsch runs out of money before he can see this case through.
That led Marsch to look for financing sources. He recently struck a deal with an investment group called KBR Group. A new entity KRMW Real Estate Investment Group was created. They would provide cash to be used for litigation, and in return, they’d receive a right to part of the proceeds of the litigation. Obviously, KBR was hoping for a victory in litigation so they’d get their share of the judgment.
Things recently went bad between Marsch and KBR, and in stepped Lennar Corp like the vultures that they are. Stuart A. Miller (President and Chief Executive Officer), Jonathan M. Jaffe (Vice President and Chief Operating Officer), and Rick Beckwitt (Executive Vice President) flew to San Diego for a secret day-long meeting with Michel Kucinski of KBR.
What was Lennar’s purpose? Get KBR to turn on Marsch.
Lennar proposed that KBR act in a way that would strip Marsch of his ownership in The Bridges, and leave him with no money and no legal rights against Lennar. In exchange for their cooperation, KBR would receive $9 million in cash (more than they had contributed to their original deal with Marsch) plus a 10% ownership stake in The Bridges.
Wait!!! 10% ownership of The Bridges? Who would want that? Lennar has been saying the project lost money. Who wants 10% of a loser?
Apparently Stuart Miller and his co-conspirators are so arrogant that they got careless. This little slip-up proves what Marsch has been saying all along… that The Bridges really does have profits and value.
Marsch and his related companies have filed suit in San Diego against KBR , alleging breach of contract and conspiracy, along with other allegations.
The other interesting part of this conspiracy? Lennar executives apparently admitted to Kucisnski during their secret meeting that their litigation strategy is simple: bankrupt Marsch before he can get to trial. He loses, they still keep his $100 million (or more) of profits from The Bridges. Not abad deal if you can get it.
See the video explaining it here.
