Uh Oh! Family feuds are never a good thing. Took down the Naito empire. Hopefully it doesn't permanently stall this tower.
Family of Portland real estate developer Tom Moyer locked in bitter, multimillion dollar feud
Published: Wednesday, November 16, 2011, 7:47 PM
Jeff Manning, The Oregonian
Heirs of Tom Moyer, the most influential Portland real estate developer of the last decade, are locked in a bitter feud over Moyer granddaughter Vanessa Sturgeon's stewardship of the vast Moyer business empire.
In documents filed Monday in Multnomah County Probate Office, 14 of the 19 Moyer family members claim:
Millions of dollars of family assets have been wrongfully diverted.
Loans were improperly closed on the signature of Tom Moyer at a time he suffered from advanced dementia.
That the Moyer dissidents earlier this year ousted Sturgeon as manager of the family's 1000 Broadway Building and forced the return of $14 million in diverted 1000 Broadway proceeds.
Sturgeon, 33, said her family members' claims are false. "The allegations in the documents are inaccurate," she said, declining to elaborate.
Rumors of internal Moyer strife circulated through Portland real estate circles in recent months as the family's stalled downtown office tower has continued to languish even as the economy slowly improved and downtown vacancy rates declined. The clash spilled into public view this week when the dissident Moyers filed their objections to a proposal that First Republic Trust Co. be made trustee of a family trust.
First Republic is too closely allied with Sturgeon, the objecting family members claimed, and an affiliate company, First Republic Bank, extended the questionable loans.
The explosive court documents were filed just 10 days after Sturgeon launched a public relations offensive vowing that Park Avenue West was back on track. The building would be completed in 2015, Sturgeon said, despite the fact it didn't have a single tenant.
The dispute casts new doubt on that schedule. It's hard enough to develop a large office building these days of tight credit, let alone when members of the controlling family are at war.
An Alzheimer's diagnosis
At the heart of the Moyer squabble is the increasing mental frailty of family patriarch Tom Moyer. The 92-year-old former boxer, movie theater mogul and real estate developer was diagnosed with advanced Alzheimer's disease in July 2010, according to court documents.
He built a significant real estate portfolio relatively late in life, stretching from the Seattle area south to Salem. Its crown jewels are the Fox Tower and 1000 Broadway buildings in downtown Portland, valued at about $260 million.
Tom Moyer has four children. But it was Sturgeon, Tom Mover's granddaughter, who emerged in 2002 as the heir apparent. She was named president of TMT and has worked closely with her grandfather since then.
But in the leadership vacuum created by Tom Moyer's dementia, the long-simmering clash between Sturgeon and much of the rest of her family burst into the open.
The dispute began this summer when her aunt and uncle, Colleen Moyer Thrift and Jon Thrift, questioned how the 1000 Broadway Building and Fox Tower were being operated.
Colleen Moyer Thrift alleged that more than $14 million was transferred from 1000 Broadway to other Moyer companies for the land purchase and initial construction of the Park Avenue West building. These transfers violated the 1000 Broadway limited partnership agreement, she argued.
The dispute never went to court. The 1000 Broadway operating agreement called for disputes to be handled in private arbitration.
In the court papers filed Monday, the dissident Moyers claim they settled the arbitration when Sturgeon agreed to give up control of 1000 Broadway and to return the $14 million.
The family stalemate
The more recent controversy centers around who will control the Marilyn Moyer Trust.
Marilyn Moyer was Tom Moyer's wife. She died in 1988. The Marilyn Moyer Trust owns half of another Moyer company, Tom Moyer Theatres, which in turn owns about $77 million worth of real estate.
Kimberly Moyer, another of Tom Moyer's daughters and Sturgeon's mother, in October requested the appointment of First Republic as trustee. First Republic was already overseeing other Moyer assets. To introduce a new player to the mix risked "deadlock or stalemate," Kimberly Moyer wrote.
But Tom Moyer's three other children, Tom, Tim and Colleen, and their children, were no fans of First Republic, which they viewed as too closely allied with Sturgeon,
"Over the least 15 months, First Republic had consistently and repeatedly taken positions aligned with particular beneficiaries of the Marilyn Moyer Trust – especially petitioner Kimberly Moyer and her daughter Vanessa Sturgeon," the dissident family members argued in their objection to First Republic.
The company "ignored evidence that assets had been diverted" from 1000 Broadway and the Fox Tower, they allege. "First Republic not only declined to rectify the transfers, but left (Sturgeon) in control of the 1000 Broadway and Fox Tower, despite the fact that she was implicated in the improper transfers."
The dissident Moyers also question two 2010 loans totaling more than $6.8 million made to Tom Moyer Theatres by First Republic Bank, an affiliate of First Republic Trust Co.
Tom Moyer signed the loan documents on behalf of the borrowers in May and June 2010, weeks before he was diagnosed with advanced Alzheimer's.
Now, the court documents claim, that $6.8 million has also been diverted:
"Presumably, First Republic did not lend $6,825,000 to Tom Moyer Theatres without asking how the loan proceeds would be used. If so, First Republic Bank knew, or should have known, that the loan proceeds were being improperly diverted from the Marilyn Moyer trust."
The family also questioned how First Republic could negotiate the loans with Tom Moyer in light of his deteriorating mental condition. "First Republic Bank should also have known that the person signing for the loans had advanced Alzheimer's, or at least that he was suffering from some form of serious cognitive impairment," the dissident Moyers argued in their objection.
There's no way First Republic can serve as trustee because it would have to investigate itself, the Moyer objectors argued. The trustee "will have a duty to investigate whether the First Republic Bank loans to Tom Moyer Theatres were properly entered into by a person with the requisite capacity," the Moyers argued in their objection. "The trustee will also have a duty to investigate and seek recovery of the $6,825,000 in diverted loan proceeds. First Republic would have an irreconcilable conflict in connection with these matters."
Neither Karin Barber, First Republic senior trust officer, nor Philip Jones, a Portland attorney who works for First Republic, could be reached for comment.
The dissident Moyers have nominated Washington Trust Bank and Christopher Folkestad, a Portland CPA, to serve as co-trustees.
They have asked the court to reject First Republic and appoint their trustees, or to have a hearing.
-- Jeff Manning