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A local developer involved in a couple of high-profile commercial real estate projects is suing his business partner for allegedly shutting him out of the company’s operations earlier this year.
Drew Loftus, a principal with Indianapolis-based Silverstone Development LLC, claims in a six-page filing with Marion County Superior Court that he has not had access to the company’s offices, calendars, communications or financial records since May, when his partner, Dale Johns, allegedly severed his involvement in the firm.
He also claims Johns, a Zionsville resident, has not been willing to share details of the company’s current operations that would provide further information about its performance and the value of Loftus’ interest in the company.
The filing states the pair “have had discussions about a potential buyout and repurchase of [Loftus’] interests in Silverstone,” but Johns has not been willing to share specific records requested by Loftus about the company, including its development schedules, lines of credit and various correspondence and account statements.
Loftus and Johns have been partners since late 2021, when Johns became a partner at Loftus Robinson—replacing co-founder Kyle Robinson, who left in 2020. The pair later created Silverstone, with their projects absorbing the Loftus Robinson portfolio that includes the $85 million Kimpton hotel now taking shape at 1 N. Pennsylvania St. in downtown Indianapolis and ownership of the long-stalled Wilshaw project at the southeast corner of Main and West 16th streets in Speedway.
The firm also owns the J.F. Wild Building downtown at 129 E. Market St.
The lawsuit by Hamilton County resident Loftus comes as the developer himself faces a separate suit involving the Wilshaw hotel: a foreclosure suit from a holding company that holds a lien on the property claiming that a past loan has not yet been paid back.
That case is in a holding pattern. Loftus’ representatives have made at least six requests for more time to respond to allegations.
In Loftus’ case against Johns, his attorney sent a letter July 30 to a representative for Johns alleging that Johns had been courting investors to support an attempt for him to take full control of the company, but had not been willing to discuss with Loftus details of the firm’s performance in order for him to determine a payout.
It also claims that Loftus signed an agreement in August 2022 to make Johns sole manager of the company, at a time when Loftus was “intoxicated and under duress” and didn’t receive a copy of the resolution to review.
“After our client [Loftus] was approached unexpectedly to discuss a buyout of his position in the company, he was willing to entertain that possibility based on an expectation that those discussions would be handled in a manner that respected his rights as a member of the company and appropriately valued his contributions to the company over the years,” the letter said. “Unfortunately, it has become apparent that your client [Johns] is not interested in conducting himself accordingly and, in fact, we believe your client has violated, and continues to violate, his fiduciary duties to the company and to our client.”
Loftus and his attorneys have requested extensive records from Silverstone and Johns, citing Indiana statute that allows business owners to inspect records related to the company’s operations. The records being requested, for all of the company’s projects, include:
— current financial models;
— agreements and draft agreements, including those for franchises, management, loans and financing, as well as letters of intent and memorandums of understanding;
— communications related to those agreements;
— communications regarding financial underwriting;
— development schedules and budgets;
— documents related to the Kimpton project including account statements, advisory agreements, draw submissions and payments to vendors;
— correspondence with various entities including Choice Hotels, CIG Capital, Intercontinental Hotel Group, Hyatt Hotels and Johnson Controls; and
— copies of correspondence and records related to additional financial details such as lines of credit, banking accounts and project costs.
Loftus is requesting the court provide a preliminary and permanent injunction against the company and Johns, which would require the firm to provide those documents, as well as reestablish Loftus’ access to corporate records and the company’s computer network.
Loftus declined to comment for this story. A phone message left for a number believed to belong to Johns was not returned. An attorney for Johns also did not immediately return a call requesting comment.
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