A former joint business partner is suing DeBartolo Development of fraud, claiming the company exaggerated its record and dropped out of a real estate investment fund for apartment complexes throughout Florida and the Southeast U.S.
Tampa-based DeBartolo is a real-estate company headquartered at 4401 W. Kennedy Blvd. Edward Kobel serves as president and chief operating officer. The CEO of its parent company is Edward “Eddie” DeBartolo Jr., one of Tampa Bay’s richest residents and a former owner of the San Francisco 49ers.
In 2014, DeBartolo Development partnered with Mainstreet Capital to help raise tens of millions of dollars in capital for developing real estate, particularly large apartment complexes in the Southeastern United States.
Brothers Todd and Craig Marshall are founders of Mainstreet Capital, headquartered in Stuart.
In a suit filed in Hillsborough County Circuit Court April 14, Mainstreet alleges DeBartolo told them that a Canadian pension fund already had agreed to invest $40-million, and DeBartolo’s reputation in the real-estate world would boost fundraising.
Mainstreet agreed, and formed a joint venture — dubbed DeBartolo-Mainstreet. According to its website, managing partners are Kobel, David Perlstein (of Magno Aere LLC), and both Todd and Craig Marshall.
However, Mainstreet is saying the deal soon soured.
The lawsuit accuses DeBartolo of exaggerating its record of successful fundraising and development, and “thwarted the venture” by refusing to give information to large institutional investors.
In addition, DeBartolo representatives either skipped or canceled key meetings, and ultimately pulled the group — and the well-hyped “DeBartolo” name — out of the joint venture.
Mainstreet is asking the court to award damages for fraud, negligent misrepresentation, tortious interference with a business relationship, as well as breach of fiduciary duty.