One of Chattanooga's most public partnerships is going through an acrimonious breakup amid allegations of secret meetings, backroom dealings and accounting misappropriations, court papers show.
Real Estate Partners represents hundreds of prestigious Chattanooga addresses from downtown to out-of-town, including well-known locations like Bridgeview on the North Shore and the Museum Bluffs residences.
Partner Darlene Brown is married to Chattanooga developer Eugene "Buck" Schimpf, who has worked to build a signature hotel and condo development on the city's riverfront.
Real Estate Partners counts 43 agents on its payroll, according to its website, and has developed a reputation as a go-to firm for big projects.
However, a court dispute has arisen after partner Gina Sakich filed for a temporary restraining order against partners Brown and Adelia Mosley, according to Chancery Court documents.
Sakich, who owns 45 percent of the company, alleged in her complaint that Brown -- also a 45 percent owner -- and Mosley, who owns the remaining 10 percent, had conspired to cut her out of the business and make the partnership unbearable.
An attorney for Brown and Mosley denied the allegations, calling them scurrilous.
Bart Quinn said he anticipated the allegations against his clients will be disproven.
"We feel like once this matter is adjudicated, Darlene and Adelia will disprove all the scurrilous allegations that were made in the complaint," Quinn said.
But, Sakich said that through their combined 55 percent voting interest, Brown and Mosley decided at a secret meeting to elevate Brown to a brand-new "managing partner" position, compensate Brown retroactively for those duties, and require all partners to contribute more money to the company. Those actions would dilute the value of her share of the company and make it impossible for her to sell, she said.
"The Defendants' foregoing actions amount to a "poison pill," that is, a course of action intended to make membership in the company abhorrent in an effort to devalue plaintiff's membership interests," Sakich's complaint said.
Mosley's support came at a price, Sakich charged. Brown transferred $500 in October to Mosley, which Sakich said doesn't reflect a payment of Mosley's salary. When Sakich attempted to go through the company email to find other evidence of what she called misappropriation, Mosley refused to divulge the passwords, according to email evidence.
Sakich also alleges that Brown used $66,000 in company funds to pay for a down payment on her own home, although Brown's lawyer said this was a mistake by the bank.
It all started in September when Sakich entered discussions with Belinda Winslett, a founder of the company in 2006 who had sold her shares in 2007. Winslett wanted to buy back in, and she wanted to buy Sakich's share. But under the terms of the company's operating agreement, Sakich had to first offer her share of the company to the other partners before selling to an outside person.
Winslett had offered Sakich $150,000 for all of her voting share of Real Estate Partners and half of the 45 percent ownership, which would value the company at something like $800,000. So Sakich made the same offer to Brown and Mosley, as she was required to do.
The complaint alleges that a series of special meetings were called that would transform the partnership into something more dictatorial, with Brown installed as company president. New "capital calls" would make being an owner more expensive. When Sakich finally received an agenda for the special meeting, it appeared designed to "prevent the sale... to Ms. Winslett."
But she may have trouble having her case heard in court. Among other agreements, the company has an operating agreement that requires disputes to be solved through arbitration before they are brought to court.
Sakich wouldn't comment on ongoing litigation, except to say that she's already moving on from Real Estate Partners. She said she wants to take her clients with her to her new company.
"My focus is on the team that is opening our new firm and the exciting plans we have for the future," she said via email. "The division of a longtime partnership is never easy. However, while my goal has always been to do so in a thoughtful and expedient manner, this process has been much more difficult than any of us could have imagined."
Contact staff writer Ellis Smith at firstname.lastname@example.org or 423-757-6315.
Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...