LV firm dragged into Minnesota mall dispute

Monday, March 11, 2002 | 9:51 a.m.

Melvin Simon & Associates, a partner of the Ghermezian family in the massive Mall of America in Bloomington, Minn., wants attorneys at the Las Vegas law firm Lionel Sawyer & Collins to comply with a subpoena to produce documents about two members of the Ghermezian family.

The Simon Property Group affiliate, in court papers filed March 5 in Las Vegas, said it needs the information to disprove a lawsuit filed in 1999 in federal court in Minnesota by the Ghermezian family's development company Triple Five of Minnesota Inc. against Simon, its partners and several affiliates.

That suit accused Simon, its partners and affiliates of usurping the family's opportunity to buy another partner's interest in Mall of America.

The defendants include Melvin Simon & Associates' partners, Melvin Simon, Herbert Simon and Randolph Foxworthy, Simon Property Group, Simon Management Associates Inc. and Mall of America Associates.

The Ghermezians, who operate in Las Vegas as Triple Five Development and own Boca Park at Charleston and Rampart Blvds. and other Las Vegas commercial properties, said the Simon company usurped its opportunity to buy half of Teachers' Insurance and Annuity Association of America's interest in the mall.

Simon, which argued "financial inability is a defense to usurpation of corporate opportunity in Minnesota," said a federal court in Minnesota granted its request for information on David and Eskandar Ghermezian because the information would be relevant to whether Triple Five would have received a loan for acquiring Teachers' interest in the mall.

But Lionel Sawyer, which was hired by the Ghermezians to assist in their application for a banking license in 1998 for a proposed bank called Peoples First Bank, refused to provide a majority of the subpoenaed documents, citing attorney-client confidentiality privileges.

Simon disputed Lionel Sawyer's arguments, saying it can't withhold the information because the lawsuit already has a confidentiality stipulation and protective order and the court had specifically required that the information be designated for "attorneys' eyes only."