PHOENIX-After nearly three years, Gray Development Group’slawsuit against Northeast Phoenix Partners has concluded with aMaricopa County jury awarding Gray Development a judgment of $110.6million.

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NPP's leadership is closely related to executives withChicago-based Klutznick Co. A number of Klutznick executives areinvolved in NPP in various ways.

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While NPP will likely pay a portion of the settlement incash, the company’s biggest asset is a 120-acre parcel in the5,700-acre Desert Ridge master-planned community, and GrayDevelopment plans to take control of that parcel, according toMichael Kibler, an attorney with Simpson Thacher & Bartlett. Herepresented Gray Development and tried the case with his partnerBarry Ostrager.

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“We are now known as the judgment creditor, and [Klutznick] isknown as the judgment debtor,” Kibler tells GlobeSt.com. “We havethe right to take their assets.” However, Gray Development’sability to gain control of the parcel is complicated by NPPmove to assign ownership of the land to a Delaware-basedcorporation involved with Klutznick Co.

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Ed Aro, attorney for Northeast Phoenix Partners, tellsGlobeSt.com via e-mail that the judgment was expected. "Itis a formality that simply signals that the next phase of thiscase has begun," he writers. "NPP now has the right to ask thetrial court to reject the jury's verdict based on the numerouslegal errors that led to that judgment. NPP also has anabsolute right to appeal. We are confident that the judgmentwill be reversed and that in the end the courts will confirm thatNPP has done nothing wrong."

The case concerned Gray Development's attempt to develop a 41-acreparcel located in Desert Ridge on Deer Valley Road across thestreet from NPP’s mixed-use developments, Desert Ridge Marketplaceand CityNorth.

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Gray Development acquired the parcel for $32 million in 2004 ata state auction and planned to build luxury apartments on thesite. During the trial, Kibler presented evidence thatNortheast Phoenix Partners abused its powers as Desert Ridge’smaster developer to block Gray Development from moving forward withits own project.

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The jury agreed that Gray Development’s project was held up byNortheast Phoenix Partners. The total judgment recompenses the firmfor money it spent out-of-pocket to try to develop the project, aswell as revenues it would have generated over time if it had beenable to build the project as outlined in its purchaseagreement.

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“This case is unique because it is the first in Arizona where amaster developer has been held liable for breaching fiduciaryduties to other developers who are developing projects in themaster planned community,” Kibler explains, adding that NPPnot only served as master developer, but the firm also was buildinga project that would compete with Gray Development’s luxurymultifamily project – not only for residents, but also forinfrastructure, power and water.

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Gray Development gave up on its plans to develop the land afterit was unable to receive approvals from the community’s HOA anddesign review committee and failed to find a bank to refinance themortgage on it. The firm let the land go back to the state, andtoday, the land remains virgin desert.

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