A federal judge has set a September 21 trial date in a case between Chevron TCI, a subsidiary of the petrochemical giant, and the Baton Rouge-based Wilbur Marvin Foundation over $10.9 million Chevron TCI says it is owed for its role as an investor in the Hilton Baton Rouge Capitol Center downtown.
The Wilbur Marvin Foundation, a support foundation of the Baton Rouge Area Foundation, is the sole owner of BRAF’s real estate company, Commercial Properties Realty Trust, which redeveloped the historic hotel more than a decade ago.
Chevron TCI filed the suit in U.S. Middle District Court in August 2018, and the case is currently wending its way through the courts, with both sides awaiting a ruling on a procedural issue that has been on hold since November.
Most of the financial information that has surfaced in the case through the discovery process over the last several months has been filed under seal, so it’s hard to know exactly what’s going on or what may have turned up.
The case is important, though, because at its center is one of the city’s most significant real estate development projects in recent decades—the nearly $70 million renovation of the former Capitol House hotel, a key catalyst in the redevelopment of downtown.
Though not well known outside of BRAF circles until the suit was filed in 2018, Chevron TCI was a major investor in the project in 2005. At the time, the Chevron subsidiary served as an investment arm for the corporation, investing in real estate projects around the country in return for federal historic building tax credits.
As part of its deal in the Hilton project, Chevron TCI had an equity stake in the hotel operating company and had an option with that entity and the Wilbur Marvin Foundation to buy back its interest in the property at a discounted price at a later date.
But Chevron TCI didn’t try to exercise that right until 2015—three years after Commercial Properties had sold the hotel to out-of-state owners for $40 million. When the foundation refused to pay Chevron the $11 million, arguing the operating company no longer existed, Chevron sued, arguing breach of contract, a claim the foundation’s attorney denies.
At the moment, Chevron is trying to depose a local CPA with KPMG, who did accounting work related to the project. But KPMG is fighting efforts to force the CPA to testify, arguing that the firm has been “thrust in between” the two sides and asked to reveal “confidential information.” A judge has yet to rule on the matter, which has been tied up in court since early November.
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February 05, 2020 at 05:30PM
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Chevron, BRAF entity heading to court later this year over Hilton investment - Greater Baton Rouge Business Report
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