Financial information like tax returns and balance sheets will play a role in a Boone County lawsuit involving one of Missouri’s biggest businessmen.
The state Supreme Court denied Stan Kroenke’s request Tuesday to keep that information out of discovery involving a lawsuit filed by former business partner Jim Alabach. Kroenke and fellow commercial real estate owner Otto Maly will have to turn over financial information for the jury to consider punitive damages, should they side with Alabach in a four-day July 2017 trial.
Alabach managed several limited liability companies for The Kroenke Group Management, Inc. In 2012, according to the lawsuit, Kroenke and Maly withheld cash dividends Alabach was owed from those properties, including the Natural Grocers at Stadium Boulevard and Worley Street, and the “Hall Theater” building downtown, which then housed Panera Bread.
The judge in Alabach’s case, Jon Beetem of Cole County, ordered the two release a limited amount of their financial information, which Alabach’s attorney Michael Berry said is an important issue for more than just the employee.
“[The lawsuit] is important because lots of people have ownership interest in companies like this, and it’s important that the people who manage them and who own the controlling interests deal fairly with the minority shareholders,” Berry told ABC 17 News.
David Brown, attorney for Kroenke and Maly, did not respond to ABC 17 News’ request for comment Wednesday night.
When Alabach complained about the withholdings, the two “retaliated,” the lawsuit said. Kroenke bought a promissory note for Natural Grocers that he and Alabach had personally guaranteed, “tied it to his wholly owned company, BCMO Investors, LLC,” and declared a default against Alabach for “the entire unpaid balance.”
The two then sued Alabach for $5.4 million.
Maly and Kroenke later dropped that suit when former Judge Gary Oxenhandler ordered BCMO Investors to give up some of its financial information.
Berry said a jury will need the financial information when awarding punitive damages, should they decide in favor of Alabach. Their decision is based, per jury instructions, on an amount that would deter others in a similar position as Kroenke from acting the same way.
“We’re going to ask for justice,” Berry said. “We’re going to ask for injunctive relief to keep this from happening again, and we’re going to ask to be compensated for everything he’s been put through.”
Berry said he’s still not sure why the two withheld dividend payments, or exactly why Kroenke bought the promissory note on the Natural Grocers building. He hasn’t gotten a clear answer through the depositions done so far.
Kroenke drew the ire of Missourians earlier this year when he orchestrated a move of the St. Louis Rams NFL team, which he owns, to Los Angeles. He also owns Kroenke Sports Enterprises, which includes several Denver-area professional teams, and is the majority stakeholder of English Premier League team Arsenal.
Forbes estimates Kroenke is worth $7.3 billion.