Judge dismisses lawsuit against Edgardo Defortuna tied to Jade Ocean

Judge dismisses lawsuit against Edgardo Defortuna tied to Jade Ocean

Edgardo Defortuna and Jade Ocean (Credit: The Jills)

A Miami-Dade Circuit Court judge dismissed a lawsuit against Edgardo Defortuna that alleged the developer lied to lenders by claiming a big loss on the Jade Ocean condominium project in Sunny Isles Beach. The judge’s ruling comes on the heels of a five-year legal battle.

Capital Building, Florida Beach Investment and Spartan Lending brought the case against Defortuna. The suit claimed that Defortuna told his lenders the high-rise project at 17121 Collins Avenue, completed in 2009, was a money loser, then paid fat fees to corporate affiliates under his control.

“I feel totally vindicated,” Defortuna, president and CEO of Fortune International Group, told The Real Deal. Judge William Thomas issued his ruling in court, and it has not yet been entered into the court filing.

But an attorney for the plaintiffs, Jennifer Recine, claimed the judge dismissed the counts “solely on pleading technicalities, and not on the merits of the underlying allegations of self-dealing by Mr. DeFortuna.” Recine, of the New York-based firm Kasowitz Benson Torres, said the plaintiffs will appeal.

Capital Building and Spartan Lending each loaned $250,000 to the Jade Ocean project, and Florida Beach made a $500,000 equity investment. All three plaintiffs said they were told that Jade Ocean was unprofitable; none recovered the money they had put into the project. Each plaintiff had sought damages three times the amount they put into Jade Ocean, plus accrued interest.

In their lawsuit, the plaintiffs alleged that Defortuna made “preferential” payments of interest and principal to companies controlled by his Fortune International Group.

For example, Fortune paid one of its affiliates the principal amount of a $7 million loan to the Jade Ocean project plus “substantial interest.” Fortune also paid “inflated” fees and commissions to an affiliated management agency and sales group for their work on the Jade Ocean project, according to the Miami Herald.

Defortuna claims he has spent more than $1.5 million in attorney’s fees.

“My most important issue was preserving the integrity and honesty with all our investors, that we cannot favor any one,” he said.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *