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Lawsuit that Threatened Sale of Kiawah Island, South Carolina Resort Developer is Settled

Positive Resolution Bodes Well for Kiawah Partners' Current Projects

By John McDermott, The Post and Courier, Charleston, S.C.McClatchy-Tribune Regional News

Dec. 04, 2012--A lawsuit that threatened to unravel one of South Carolina's most prominent luxury resort developers was settled Monday in a confidential deal.

Kiawah Partners said the details of the agreement between the Charleston-based company and Long Family Associates LP won't be released.

"This positive resolution bodes well for the continuing development" of Kiawah Partners' projects, according to a joint statement released Monday.

The dispute was a high-stakes family feud that centered over control of vast real estate holdings that are likely worth hundreds of millions of dollars.

Long Associates includes Leonard Long, a lawyer who until last year was a Kiawah Partners executive vice president. His falling out with first cousin Charles P. "Buddy" Darby, who is president of the development firm, sparked a blistering lawsuit in June.

The complaint was filed by a group of partnerships, trusts and individuals who were minority owners in seven real estate ventures led by Darby. They asked that all of the assets of those businesses be dissolved and for the properties to be either divided up or sold.

All the plaintiffs and defendants are related through blood or marriage to the late J.C. Long, whose real estate empire developed the Isle of Palms and numerous subdivisions and commercial properties in the Charleston region.

The lawsuit alleged that Darby had tried to "squeeze" the smaller partners out of their ownership interests in what were called "the Kiawah entities."

The complaint also suggested that the minority partners, who had a 17 percent ownership stake, objected to investments Darby was spearheading beyond Kiawah. Those ventures weren't specified, but Kiawah Partners owns hundreds of acres on Johns Island, as well as the Doonbeg golf resort in Ireland and the 2,500-acre Christophe Harbour development on the Caribbean island of St. Kitts.

"The plaintiffs, as minority owners, have been oppressed, abused, frozen and squeezed out, ignored, and misled," the lawsuit alleged.

Darby and Leonard Long were part of the original investment group that acquired the bulk of Kiawah in 1988. The $105 million deal at that time was said to be the largest single real estate transaction in South Carolina.

In the years that followed, the two cousins helped shape the island into the high-end tourist and vacation-home destination that it is today.

Their feud went public on June 6, about seven months after Long had retired from the Kiawah Partners.

The lawsuit was potentially devastating to the firm's finances.

Less than two weeks after the case was filed, Darby's lawyers sought an emergency hearing, saying the numerous property liens in the complaint would delay or kill some high-dollar real estate sales.

They also noted that a bank had put Kiawah Partners on notice that the lawsuit constituted a default on an $80 million loan.

The two sides have been working to settle their differences for months. They will not be commenting further about the lawsuit or the settlement, Kiawah Partners spokesman Bill Hindman said Monday.

David Slade of The Post and Courier contributed to this report.

Contact John P. McDermott at 937-5572.


(c)2012 The Post and Courier (Charleston, S.C.)

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