York County says real estate company set up by Carolina Panthers owner David Tepper ‘wasted’ $21 million of South Carolina taxpayers’ money on failed headquarters construction team social in Rock Hill, according to court records.
In a counterclaim 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 abuse by GT Real Estate “unjust enrichment.”
York County alleges in court documents that the only lawful 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 money from the Pennies for Progress tax, which is earmarked for road improvements.
“Rather than dedicating the tax funds to Mt. Gallant’s Expanded Reach as required, after the debtor received the tax funds, they were commingled with other operating funds, diverted to d ‘other aspects of the project and converted for misuse by others and unjust enrichment,’ the counterclaim states. otherwise wasted by the debtor on other project costs.”
York County wants the $21 million returned, plus interest and damages, according to lawsuits in the case.
Attorneys for the Tepper company have yet to respond in court papers to York County’s allegations of wasting the money.
Efforts to reach attorneys for GT Real Estate by email and phone on Thursday were unsuccessful.
The York County and Tepper companies are fighting in four concurrent lawsuits in federal bankruptcy and civil courts in Delaware and South Carolina.
The claim is against GT Real Estate
The lawsuit filed this week by York County against Tepper Companies is the first time York County has named GT Real Estate as a defendant in the alleged misuse of money.
GT Real Estate was the company created by Tepper to build the site. Construction halted in March due to a financial dispute, then GT Real Estate filed for bankruptcy in June, bringing the project to an end.
In a lawsuit unrelated to South Carolina federal court, York County alleges that three other Tepper companies – DT Sports Holding, Tepper Sports Holding and Appaloosa Management – were involved in a conspiracy to embezzle the 21 million of dollars.
Lawyers for the Tepper company filed a counterclaim against York County’s allegations in court papers in July that sought an injunction to stop that York County lawsuit.
Other creditors, including the contractors involved and the City of Rock Hill, claim in bankruptcy papers that GT Real Estate owes creditors at least $90 million.
In August, GT Real Estate offered $82 million to clear bankruptcy, but a Delaware federal bankruptcy judge has yet to approve the proposal, which would also require creditor approval.
The project and the collapse
The Panthers and York County reached a settlement near the start of the deal which resulted in the county spending $21 million on Pennies for Progress.
What would have been the Panthers headquarters and training site in Rock Hill is expected to involve an investment of at least $500 million, York County says in court documents. The development was expected to bring more than $100 million to the county in tax revenue and economic benefits from the project site itself and surrounding economic development, York County says.
The Tepper Companies and York County alleged in court documents that the City of Rock Hill failed to issue more than $100 million in bonds for the project, leading to the work stoppage and bankruptcy.
Rock Hill denied that it was required to issue bonds.
The site is now inactive as the bankruptcy and lawsuits progress.
Where are the lawsuits?
Tepper’s attorneys have asked the Delaware bankruptcy judge for an injunction that would end York County’s federal lawsuit. The judge has yet to rule.
A South Carolina federal judge ruled in court papers that she was inclined to move York County’s original lawsuit against the Tepper Companies to Delaware because the bankruptcy case is pending in Delaware.
York County attorneys opposed both the injunction and moving the prosecution to Delaware. York County and other creditors want it all in South Carolina courts.
Bankruptcy creditors asked the Delaware judge to issue a change of location from Delaware to South Carolina for the pending bankruptcy. A hearing in Delaware on that venue change is scheduled for later this month.