Suit accuses Aspen Daily News owner David Danforth of freezing out partner
May 30, 2013
A lawsuit accuses Aspen Daily News owner David Danforth of withholding funds from accounts tied to a building he and a fellow business partner own.
Danforth denies the allegations.
Filed by two limited-liability corporations, Gladwyne Investments and 517 East Hopkins Avenue, the suit contents that Danforth has hamstrung partner Dan Martineau by freezing bank accounts, refusing to sell the building when the market was hot and withholding income.
The suit also claims that Danforth made management decisions without Martineau's involvement, and in 2005, Danforth rejected an offer of $7.6 million for the building, partly so he "could continue renting the Aspen Daily News space at below market rent."
The building has an assessed value of $4.49 million, and Danforth's actions "have thus cost the company a minimum of $3.1 million in damages," the suit contends.
Danforth and Martineau bought the City Plaza Building, at 517 E. Hopkins Ave., for $3.8 million in May 2000. The building's primary tenant is the Aspen Daily News.
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Danforth, however, said there's more to the story than what's described in the suit.
"When Dan talks about me running the building, I run the building because he doesn't live here," Danforth said. "If he wants to help run it, fine."
He also said that the claims about refusing to sell the building for a profit lack merit.
"That's what anybody in real estate would say," he said. "How could he resist making that claim?"
Martineau did not immediately return a call left on his cellphone Wednesday. The suit says that Martineau lives in Maricopa County, Ariz.
Last year, both sides were willing to buy each other out, but Danforth was not willing to provide records to an appraiser to determine an appropriate price, the suit says. Danforth continues to ignore Martineau's requests for financial records, the suit says.
Danforth, however, said that a final appraisal was done and that "the amount was set in stone."
"I declared myself to be the buyer," he said. "There's no disagreement whatsoever. That story changed along the way. (Martineau) reneged because he didn't like the way it was going to work."
Danforth said he has restricted Martineau's access to financial accounts tied to the building for reasons he declined to disclose.
"All of the surplus has gone toward paying down the debt," Danforth said, adding that "neither Dan or I have signed personal checks on that account for a long time."
Despite the legal feud, Danforth said he has enjoyed working with Martineau.
"This has been a very challenging partnership, and the only reason I actually enjoy it is because Dan is a pleasure to be around," Danforth said. "He's fun to work with except for his moods.
"He gets suspicious, but money is loud, and when there was no money, there were no disagreements. But now that there's money, there's a disagreement."
The suit was filed in Pitkin County District Court by a law firm in Scottsdale, Ariz., and David Kelly, of Oates, Knezevich, Gardenswartz, Kelly & Morrow PC in Aspen.