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Development company files memorandum bolstering its claimed right to sue over WTC development

By Karen Kidd | May 27, 2016

NEW ORLEANS – With a hearing date looming after the long Memorial Day weekend, attorneys for the company that lost its bid to develop the former World Trade Center in New Orleans have filed a memorandum they hope will bolster their right to sue the city. 

The 44-page memorandum filed in Orleans Civil District Court by the New Orleans Davillier Law Group, which represents Two Canal Street Investors (TCSI), is a response to a defense motion for the judge to dismiss the case, claiming the company has no right of action. In its memorandum filed earlier this week, Two Canal Street Investors begs to differ, stating the company is a legally established corporation doing business in Louisiana and has all the legal rights of any other such corporation.

"TCSI - and not its shareholders - has a corporate right of action to prosecute a Public Lease Law challenge against Defendants in TSCI's capacity as an unsuccessful bidder," the memorandum says. "No TCSI shareholder, past or present, has ever asserted a personal right of action based on TCSI's participation in the illegal and invalid RFQ and RFP process, which resulted in the unlawful (and astoundingly below market) Carpenter Woodward lease."

The court will have no choice but to deny the defense motion, Charline K. Gipson, an attorney with the New Orleans Davillier Law Group, said in an email to the Louisiana Record.

"We believe the court is once again legally constrained to deny the renewed (defense) motion since absolutely nothing has changed since the court’s prior ruling," she said. "It is bizarre that they (the defense) would ask the court to ignore the existence of a valid corporation to evaluate whether there is a right of action based on individual shareholders. In fact, NEVER in the history of Louisiana has a court ignored the separate legal existence of a corporation to evaluate whether a right of action exists."

The case is scheduled to be heard before Orleans Civil District Judge Tiffany Chase on Wednesday

The New Orleans Mayor's office did not respond to a Louisiana Record request to comment.

Carpenter-Woodward's attorneys have already backed up their own case with filings that fill a 4-inch binder with supporting materials. Those supporting materials likely include emails from Two Canal Street Investors officials before any litigation was filed. Those emails praised the city's handling of the bidding process and spoke with approval of the winning bidder's plans for developing the former World Trade Center.

However, it's the corporate entity and not its shareholders that matter, Gipson said.

"TCSI has properly and consistently maintained its corporate form, is active and in good standing with the Secretary of State, and simply cannot legally be deprived of its day in court for a trial on the merits," she said. "The law that TCSI unequivocally has a right of action is beyond controversy. Furthermore, there is no legal authority whatsoever to ignore TCSI’s conclusive corporate existence, which state law says is evidenced by a certificate of existence or a certificate of good standing from the Louisiana Secretary of State (see La. R.S. 12:1-128(C)), both of which TCSI has obtained."

Defendants in the case have repeatedly maintained Two Canal Street Investors now is a shell of its former self, purchased for $10 by a Florida businessman, after the company's bid to develop the WTC was lost, with the sole purpose of profiting from litigation.

The case is one of two lawsuits filed by Two Canal Street Investors against the city and various city officials. In March, Two Canal Street Investors filed its second lawsuit in Orleans Civil District Court condemning the selection process by which New Orleans awarded the development to Four Seasons New Orleans. That latest lawsuit also names as defendants members of the real estate consulting team who advised the city in that process.

Trial for the older of the two lawsuits is set to begin in October.

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Organizations in this Story

Carpenter-Woodward Davillier Law Group

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