Joseph D. Hope
Is Lubert-Adler Partners in trouble? Not financially — at least, not yet. The vaunted Center City real-estate investment firm’s current fund is worth $2.5 billion, and its clients include a who’s who of big-shot Philadelphia investors. But if the company, headquartered in the Cira Centre, finds itself on the losing end of several nine-figure federal lawsuits filed in Florida and inching toward trial, that could change.
“The biggest expense [for Lubert-Adler] is running their name through the dirt,” says Florida real-estate blogger Toby Tobin, who has reported extensively on the cases.
The allegations stem from a series of resort-residential developments Lubert-Adler undertook with Florida developer Edward “Bobby” Ginn. In 2006, Ginn and Lubert-Adler took out a $675 million loan against five of their properties. They pocketed about half that sum, the lawsuits claim; but when the housing market tanked in late 2007 and 2008, some of their companies filed for bankruptcy, leaving some of their resorts unfinished and their buyers in the cold. Other lawsuits, including a potential class-action case filed by King of Prussia attorney Joseph Meltzer, center on the developers’ allegedly shady sales practices, such as falsifying property records to make lots look more valuable than they really were. According to Meltzer’s suit, A&G Enterprises, a company formed by Ginn and Lubert-Adler CEO Dean Adler, bought their own properties at a discounted rate and then flipped them for a considerable profit — sometimes on the same day.
It’s not just the developers on the hook. One of the fraud claims also names as defendants hundreds of Lubert-Adler’s investors — Harvard, Yale, Drexel, Jefferson, and the pension funds for Pennsylvania government and school workers — because they benefited from Lubert-Adler’s alleged misdeeds.
Of course, for Lubert-Adler to take a hit, the local media would have to notice — and so far, that hasn’t happened. Neither daily has reported on the lawsuits; the most substantive print coverage came from a 2009 New York Times piece. In it, Dean Adler denied any wrongdoing, saying he “never participated or received a penny of profit” from the land-flipping, and that, when sales slowed, his company reinvested about $330 million that it took from that $675 million loan back into its properties. Ginn, who could not be reached for comment, denied any wrongdoing to the Times.