Did Tepper company ‘squander’ $21 million? That’s what a recent York County lawsuit claims
York County claims that the real estate company created by Carolina Panthers owner David Tepper “squandered” $21 million of South Carolina taxpayer money in the failed effort to build the team’s Rock Hill headquarters, court records show.
In a counterclaim lawsuit filed this week in Delaware bankruptcy court, York County alleges GT Real Estate used the money for the entire failed project -- instead of specific road improvements.
The claim calls the alleged misuse by GT Real Estate “unjust enrichment.”
York County alleges in court documents that the only legal use of the county’s $21 million was for specific improvements on Mount Gallant Road. The headquarters site would have been off Mount Gallant Road near Interstate 77 in Rock Hill. The $21 million came from Pennies for Progress tax money, which is designated for road improvements.
“Rather than dedicating the Tax Funds to the Mt. Gallant Expanded Scope as was required, after the Debtor received the Tax Funds, they were commingled with other operating funds, misappropriated to other aspects of the Project, and converted for others’ improper use and unjust enrichment,” the counterclaim states. “None of the Tax Funds were used for their contractually intended and statutorily designated purpose and were otherwise squandered by the Debtor for other costs related to the Project.”
York County wants the $21 million paid back, plus interest and damages, according to lawsuits filed in the case.
Tepper company lawyers have not yet responded in court documents to York County’s allegations of squandering the money.
Efforts to reach lawyers for GT Real Estate through email and telephone Thursday were unsuccessful.
York County and Tepper companies are battling in four simultaneous legal actions in Delaware and South Carolina federal bankruptcy and civil courts.
Claim is against GT Real Estate
The suit filed this week by York County against Tepper companies is the first time York County names GT Real Estate as the defendant in the alleged misuse of the money.
GT Real Estate was the company created by Tepper to build the site. Construction stopped in March over a money dispute, then GT Real Estate filed bankruptcy in June, which brought the project to an end.
In an unrelated suit in South Carolina federal court, York County alleges three other Tepper companies -- DT Sports Holding, Tepper Sports Holding and Appaloosa Management -- were engaged in a conspiracy to misappropriate the $21 million.
Tepper company lawyers filed a counterclaim against the York County allegations in court documents in July that asked for an injunction to stop that York County lawsuit.
Other creditors, including the contractors involved and the city of Rock Hill, claim in bankruptcy documents that GT Real Estate owes creditors at least $90 million.
In August, GT Real Estate offered $82 million to clear the bankruptcy, but a federal bankruptcy judge in Delaware has not yet approved that proposal, which also would need creditor approval.
The project and the collapse
The Panthers and York County entered in an agreement near the beginning of the deal that led to the county spending the $21 million in Pennies for Progress money.
What would have been the Panthers headquarters and practice site in Rock Hill was projected to involve an investment of at least $500 million, York County states in court documents. The development was expected to reap over $100 million for the County in tax revenues and economic benefits from the Project site itself and surrounding economic development, York County states.
Both the Tepper companies and York County have alleged in court documents that the city of Rock Hill did not issue over $100 million in bonds for the project, which led to the work stoppage and bankruptcy.
Rock Hill has denied it was required to issue bonds.
The site now stands idle as the bankruptcy and lawsuits plod forward.
Where the lawsuits stand
Tepper company lawyers have asked the Delaware bankruptcy judge for an injunction that would halt York County’s federal lawsuit. The judge has not yet ruled.
A South Carolina federal judge has ruled in court documents she is inclined to move the initial York County lawsuit against the Tepper companies to Delaware because the bankruptcy case is pending in Delaware.
York County’s lawyers have opposed both the injunction and moving the lawsuits to Delaware. York County and other creditors want everything in South Carolina courts.
The creditors in the bankruptcy have asked the Delaware judge to issue a change of venue from Delaware to South Carolina for the ongoing bankruptcy. A hearing in Delaware on that change of venue is set for later this month.
This story was originally published September 1, 2022 at 12:09 PM with the headline "Did Tepper company ‘squander’ $21 million? That’s what a recent York County lawsuit claims."
