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April 23, 2012
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Civil lawsuit related to Vail Four Seasons construction wraps up Friday

EAGLE - After almost a year, this week lawyers will stop dancing the Four Seasons fandango.

The most expensive and extensive case in Eagle County history is expected to end Friday. Like most civil disputes, this one's about money - lots and lots of money. It's a story about great big numbers and a great big hotel, although the hotel itself - The Four Seasons Vail - has nothing to do with the lawsuits related to its construction.

Layton Construction says Barclays Capital owes it around $30 million. Barclays, the international financial firm, counter-sued for about five times Layton's $27 million claim.

"We were in dispute about who owed what to whom," said Barclays' Haigin Baek, lasering straight to the heart of the matter while testifying last week.

Barclays, as you might recall, acquired Lehman Brothers during the economic unpleasantness of 2008.

Judge Fred Gannett is hearing the case, the first of four local development-related lawsuits to make it through the civil lawsuit process before Gannett.

Dispute heats up

After a few conversations, Baek came to the opinion that David Layton, of Layton Construction, was arrogant, she said.

In one email, a Mr. Levine from Barclays referred to Layton as "a common thief."

Layton said Barclays tried to bully them, and he was having none of that.

"Since assuming control of the project Barclays and its representatives have repeatedly bullied and threatened Layton and its subcontractors, and engaged in a pattern of bad faith actions aimed at forcing Layton and its subcontractors to finance construction, provide labor and material for free or below cost, accelerate work without compensation, build a project for your benefit," says a letter from Layton's attorneys to attorneys for Barclays.

When Baek fired Layton, Barclays owed Layton money, Baek said during testimony last week, and Layton owed its subcontractors money.

How much is owed to who is what District Court Judge Gannett will decide.

There was defective work, so the questions of who owed what to whom remained in question, Baek said.

"Was that resolved?" asked Ty Holt, one of Layton's attorneys.

"No, that's why we're here," Beck said. "We paid Layton what we believed were legitimate expenses."

When the borrower, Black Diamond Resorts, defaulted on a $200 million loan from Barclays, that put Barclays at risk, Baek said.

"Layton had hundreds of people and millions of dollars invested. Did it occur to you that they were also at risk?" asked Holt.

Layton says the designers and architects were responsible for changes and, therefore, the cost overruns. Layton made changes without her permission, Baek said.

"It is demoralizing and of great concern to everyone working on the job to have to finance the work we are performing for your benefit," Layton's attorneys wrote.

"They had a take it or leave it approach and would listen to none of our concerns," Baek said. "Hyder had more of our best interests at heart."

Layton workers were working only five days a week, eight hours a day, and that was unacceptable, especially since it's in the mountains and winter is setting in, Barclays attorneys wrote in a letter.

In the meantime, the real estate market crashed and so did the price of the condominiums and fractional units Barclays said it needed to break even.

Baek said Layton didn't cause the downturn, but didn't speed things along either.

As for Judge Gannett, who likens the Four Seasons case to James Joyce's "Ulysses" - large and panoramic - he calls it "a very complex epic."

He's paying close attention to each of the millions of details. He must. Tens of millions of dollars could potentially change hands based on his decision.

Staff Writer Randy Wyrick can be reached at 970-748-2935 or rwyrick@vaildaily.com.


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The VailDaily Updated Apr 23, 2012 08:10PM Published Apr 23, 2012 08:08PM Copyright 2012 The VailDaily. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.