Monday, July 27, 2015

O'Neill: Bank tried to 'blow out' Worthington for rival Rubin

Developer alleges bank backed out on financing

O'Neill: Bank tried to 'blow out' Worthington for rival Rubin

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Developer Brian O'Neill has sued Citizens Bank in Common Pleas Court in Philadelphia, alleging the lender wrongly demanded the return of part of the $180 million it lent O'Neill before the money it was due, and failed to provide promised follow-up financing, after Citizens and its owner, Royal Bank of Scotland, "started to collapse under the weight of billions of dollars of soured investments." O'Neill demands $4 billion in compensation, $4 billion in damages.

The suit follows Citizens' filing of a $61 million judgment in Montgomery County last fall alleging unpaid loans by O'Neill at his Uptown Worthington development in Frazer, Chester County. O'Neill's suit says the judgement is based on "sham defaults manufactured by the Bank in bad faith" for "loans that were not due." The bank has also filed judgments totalling $3 million against O'Neill's Horizon at Bensalem project. O'Neill says Citizens "has placed in jeopardy the success or viability of more than twenty-five" projects.

Among other claims, O'Neill says Citizens reneged on a financing agreement, one day before a deadline, resulting in withdrawal of VWR Corp. as the main tenant at Worthington last summer, costing the project $50 million in long-term rent. VWR moved its West Chester headquarters to Radnor instead.

O'Neill also alleges that Citizens "sometime in early 2009" had "deceitfully" contacted Philadelphia real estate investor, developer and retail leasing agent Ronald Rubin "and had offered (Rubin) the oppporunity to 'blow out'" O'Neill and his companies "and to assume control over the Worthington Project. Thereafter, a number of very significant  leases initiated by Mr. Rubin's company, including Dave and Buster's and California Pizza Kitchen, fell apart..."

UPDATE: My colleague Diane Mastrull caught up with Ron Rubin today, and he told her he hasn't talked to Citizens about Worthington, he doesn't want to take the place over, he's a good friend of O'Neill's, plus: "It's a tough economy, and Brian has to do what he has to do." More from Mastrull on this story in tomorrow's print Inquirer.

 

EARLIER: O'Neill's projects also including the government-subsidized Philadelphia Regional Produce Market, Horizon at Bensalem, Millennium in Conshohocken, Watertown Arsenal in Massachusetts, Woodcrest Corporate Center in Cherry Hill, the Riverview apartments in Valley Forge, and the redevelopment of a polluted former factory site in Sayreville, NJ.

More coverage
 
Developer O'Neill vs. bank: 'Re-negotiation by other means'

No immediate comment from O'Neill. Citizens spokeswoman Sylvia Bronner said the bank declined comment. Read the suit here.

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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