Beanie Babies' Warner prevails in trial
(Crain's) — A federal jury in Chicago has ruled in favor of billionaire Ty Warner, rejecting a $30-million claim by a Las Vegas real estate firm that the Beanie Babies magnate wrongfully cut the company out of a deal to buy a high-end Mexican resort.
After a 2˝-week trial, a jury on Thursday afternoon rejected a case brought against Mr. Warner by a little-known company called Amakua Development LLC, according to court records.
Amakua "lied about who they were and what they could do," says attorney Gregory J. Scandaglia, partner in Chicago-based law firm Scandaglia & Ryan who represented Mr. Warner and two companies he controls. "They thought they had a hook set in Ty Warner, and all they had to do was reel him in."
The reclusive Mr. Warner, who ranks 84th on Forbes magazine's list this year of wealthiest Americans, attended the entire trial, Mr. Scandaglia says.
"Ty felt this was one where he had to send a message out there," he said. "The fact that he's successful is not the reason he should be liable."
Daniel Fears, an attorney with California-based law firm Payne & Fears LLP, which represented Amakua, could not be reached.
In addition to his plush toy company, Mr. Warner, who has an estimated net worth of $4.4 billion, has been a steady investor in luxury hotel properties, including the Four Seasons Hotel in New York and Biltmore Santa Barbara Four Seasons Resort in Southern California. A message left for the assistant of Mr. Warner was not immediately returned.
Amakua filed suit over a $101-million deal in 2004 by Dallas-based JTL Capital LLC to sell Las Ventanas al Paraiso, a 71-suite resort in Los Cabos, along Mexico's Pacific Coast, to Ty Warner Hotels & Resorts LLC.
Amakua had planned to get the Los Cabos property under contract and then flip a portion of it to Mr. Warner at a profit, court documents show. But instead, Mr. Warner cut Amakua out of the transaction and dealt directly with JTL, in violation of a "Confidential Non-disclosure and Non-circumvention Agreement" with one of Mr. Warner's associates in 2003, according to a copy of Amakua's complaint.
Mr. Warner and his companies broke off talks with Amakua because Amakua falsely claimed it was working on behalf of JTL, when in fact it had no real involvement in the deal, Mr. Scandaglia says. Amakua is not licensed as a real estate brokerage firm in California, where Ty Warner Hotels & Resorts is based, Mr. Scandaglia says.
The jury verdict also cleared JTL.
Amakua originally filed the lawsuit in federal court in California in 2004, and the case was later transferred to the U.S. District Court in Chicago.
