Business partner accused of taking over development company; Suit seeks 25 years of pay back
A man accused of illegally taking over a Monroe County development venture is being asked to pay back all of the money he made during a 25-year-partnership.
Alpha Lakes Inc. filed a lawsuit against Gantt Miller III on April 16 in St. Clair County Circuit Court. Miller's wife, Korliss Miller, and his sons, August Miller, Woodrow Miller and Gantt Miller IV, are also named as defendants.
Gant Miller III and his business partner formed a 50-50 partnership in 1987 called Columbia Lakes Gamma Limited Partnership. The pair agreed to acquire and develop land for the construction of apartments in Columbia, according to the 39-page petition. The partnership agreement allegedly prohibited the transfer or assignment of a partner's interest except with a "bona fide written offer to purchase."
In June 1989, Miller and his business partner allegedly agreed to change their ownership interests, with Miller becoming the owner of 75-perecent of the Columbia Lakes Gamma Limited Partnership. The amendment reflected the change of ownership but did not modify any other part of the original agreement, reads the complaint.
Also in June 1989, a second transaction retained Miller's interest in Gamma while allowing Alpha Lakes Inc. to become a 1-percent owner in the partnership. Miller's former original business partner did not retain any ownership, according to the lawsuit.
Alpha Lakes says several administrative changes and interest transfers were made between 1989 and 1994. In October 1994, Miller allegedly proposed another amendment that would have would have transferred a significant interest in the Columbia Lakes Gamma Partnership from American Centennial Insurance Company to Miller personally. Alpha Lakes says that proposed amendment was signed by Miller and the President of ACIC but never signed by a representative of Alpha Lakes.
Despite Alpha Lakes' refusal to sign the amendment, Miller allegedly accepted the transfer of stock from ACIC, thereby breaching the Columbia Gamma Partnership Agreement, the suit says. The company says Miller controlled all of the Gamma Partnership documents and intentionally hid the partially-signed amendment reflecting ACIC's transfer of interest to him.
Alpha Lakes contends the transfer of interest from ACIC to Miller was, and continues to be, void because such a transfer constituted a breach of contract and breach of fiduciary duty.
The final transfer of interest from ACIC to Miller is reportedly reflected on a document that bears the year 1995 but no month or day. The document was written to transfer ACIC's remaining partnership interest to Gantt Miller, thereby increasing his interest to 97-percent. According to that document, ACIC was left without any interest in the Gamma Partnership. Alpha Lakes says it never agreed to sign the transfer.
Miller allegedly made additional transfers of interest to the other defendants, his wife and three sons, without notifying Alpha Lakes.
Alpha Lakes accuses Miller of failing to act in good faith and of breaching his fiduciary duty by failing to notify the company of multiple transfers of interest in the Gamma Partnership. He is also accused of making multiple distributions of money from the partnership to himself and his children without making any distributions to Alpha Lakes.
Alpha Lakes says Miller "intentionally and in bad faith" refused to give the company financial statements to which it was legally entitled and failed to provide any access to the company's books and records. He is also accused of paying himself fees which were not authorized by the partners.
Alpha Lakes says, because of Miller's "fraudulent concealment" and breach of fiduciary duty, it has been denied the opportunity to purchase the partnership interests ultimately transferred to Miller and then to the other defendants.
Alpha Lakes is asking for an order setting aside all of the transfers of interest made without the consent of Alpha Lakes Inc. The company is asking Miller be ordered to return the interests to the partnership so that Alpha Lakes may purchase them for the same value paid by Miller. Alpha Lakes is asking all of the defendants be ordered to return any money or benefits received as a result of their claimed interest in the partnership. Upon a full accounting, Alpha Lakes says that money should be returned to the Gamma Partnership.
In addition to the return of money, Alpha Lakes is asking Miller be expelled from the partnership and ordered to pay punitive damages plus court costs.
Attorney Judy L. Cates of Swansea is representing Alpha Lakes.
St. Clair County Circuit Court Case No. 12-L-192