A third contracting company filed a lawsuit against Wohali Land Estates for unpaid debts just days after the luxury real estate developer filed for bankruptcy in federal court.
Sierra Pacific Windows last week submitted a notice in Summit County’s Third District Court alleging Wohali Builders, the construction arm of the development enterprise, ordered and received $162,574 in materials and has yet to pay the cost.
Court documents additionally show the window company recorded a construction lien with the Summit County government in an attempt to force a foreclosure on the Wohali property to finance the unpaid bill.
The company requested payment for the invoice with an interest rate of 18% per annum “from the dates payments were due, until paid in full, plus attorney’s fees and costs,” an agreement Sierra Pacific Windows’ attorneys said was included in the initial contract between the company and Wohali management.
“To permit Defendants to retain the benefit without compensating Sierra would result in the unjust enrichment of Defendants at the expense of Sierra, which should not be allowed,” the complaint added.
The lawsuit is the fifth filed this year against the embattled luxury real estate developer, which filed for bankruptcy with a reported debt totaling more than $13 million earlier this month. Court documents indicated Wohali Land Estates hopes to reorganize the business to handle, and eventually pay off, its existing debt rather than disbanding the company — and abandoning the project altogether.
Shortly after the bankruptcy filing, a group of “concerned owners” who had invested in Wohali petitioned the court to allow the company to continue paying for “certain administrative expenses.” Specifically, they asked for an emergency approval of $161,689 in payments to “key employees of the golf course and resort” because payroll was due on Aug. 15.
“Keeping this golf course alive and operating is a top priority to preserve the value of the estate,” the emergency request document said. “If payroll is not made, key employees would likely quit and move on, and, as a result, the resort and golf course likely would be seriously degraded or cease to function.”
The landowners offered to pay the $161,689 amount from their own pockets as part of a one-time agreement, and Judge Peggy Hunt granted their request on Friday, the same day payroll was due.
Wohali Land Estates estimated it had between 100 and 199 creditors who were owed between $100 million and $500 million in its Chapter 11 bankruptcy filing in federal court, providing an additional list detailing that the company owes approximately $12,908,637 to its top 20 creditors alone.
Sierra Pacific Windows was included on the list of the top 20 creditors.
Two of the other companies listed as top creditors — Eave Solar and Knight Trucking — had already filed lawsuits against Wohali Land Estates this summer, demanding payment for provided services.
Eave Solar, a company committed to “delivering cutting-edge solar technologies” in Utah, filed its claim in July with allegations that the business was owed approximately $489,492 for work on six different lots within the development.
Knight Trucking, meanwhile, similarly claimed in a separate filing that Wohali failed to pay around $119,255 for the business’s work hauling materials to and from the construction site between Jan. 10 and May 28.
Thomas Cottone, who is a founding member of Wohali Builders, also filed two lawsuits against the company, a key executive and one of the business’s investors. In addition to financial mismanagement allegations, Cottone claimed the executive and investor engaged in coordinated retaliation efforts to defame him and remove him from his position on the board after he attempted to voice concerns and reestablish oversight through further financial controls.