DISTRICT COURT, PITKIN COUNTY, COLORADO 506 East Main Street, Suite 300 Aspen, Colorado 81611 ____________________________________________ ! ! _____________________________ Plaintiff: FRED LATSKO, an individual, Case Number: 14 CV v. Division: Defendants: Ctrm: DONALD R. WILSON, JR., an individual; DRW REAL ESTATE INVESTMENTS LLC, a Delaware Limited Liability Company; DRW HOLDINGS, LLC, a Delaware Limited Liability Company; DRW REAL ESTATE MANAGEMENT I LLC, a Delaware Limited Liability Company; JEROME PROPERTY LLC, a Delaware Limited Liability Company; and JEROME VENTURES LLC, a Delaware Limited Liability Company ATTORNEYS FOR PLAINTIFF: FRED LATSKO Matthew C. Ferguson, A.R. #25687 THE MATTHEW C. FERGUSON LAW FIRM, P.C. 119 South Spring Street, Suite 201 Aspen, Colorado 81611 Telephone: (970) 925-6288 Facsimile: (970) 925-2273 E-mail: matt@matthewfergusonlaw.com This case is NOT subject to the simplified procedures for court action under Rule 16.1 because: Claims against any party exceed $100,000.00. COMPLAINT AND JURY DEMAND Plaintiff, Fred Latsko (“Latsko”   or   “Plaintiff”),   by and through his counsel, THE MATTHEW C. FERGUSON LAW FIRM, P.C. for his Complaint and Jury Demand against Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 2 of 25 Defendants, Donald R. Wilson, Jr., DRW Real Estate Investments LLC, DRW Holdings, LLC, DRW Real Estate Management I LLC, Jerome Ventures LLC, and Jerome Property LLC (collectively,  “Defendants”),  states  and  alleges  as  follows:     I. INTRODUCTION This is a lawsuit arising out of a complex series of transactions that had led to ownership and control of the Hotel Jerome in Aspen, Colorado in Donald R. Wilson, Jr., and related real estate investment limited liability companies controlled by him. Latsko was critically instrumental in the transactions that lead to the acquisition of the Hotel Jerome. The promises and intent of Latsko and Wilson was to make Latsko a member in Jerome Property and/or Jerome Ventures and to otherwise compensate Latsko for his investment of money, time and expertise. Defendants have failed and refused to meet their contractual obligations to Latsko and otherwise acted inequitably. II. 1. PARTIES, RELATED ENTITIES/PERSONS Plaintiff,  Fred  Latsko  (“Latsko”),  is  an  individual  and  a  resident  of  Florida.   2. Latsko, individually and through entities, is a developer and owner of commercial properties in Illinois and in other states. 3. Latsko has conducted business in Aspen, Colorado including the transactions relevant to this lawsuit. 4. Defendant, Jerome Property LLC ("Jerome Property"), is a Delaware limited liability company, doing business in Aspen, Colorado and authorized by the Secretary of State to conduct business in Colorado with a Statement of Foreign Authority on file. 5. Defendant Jerome Ventures LLC ("Jerome Ventures") is a Delaware limited liability company, doing business in Aspen, Colorado and authorized by the Secretary of State to conduct business in Colorado with a Statement of Foreign Authority on file. 6. Defendant  Donald  R.  Wilson,  Jr.  (“Wilson”)  is  an  individual  who  does  business  in   Aspen, Colorado and who, upon information and belief, is a resident of Illinois. 7. Defendant DRW Real Estate Investments LLC   (“DRW   Investments”)   is   a   Delaware limited liability company that is not registered with the Colorado Secretary of State to conduct business in Colorado, but upon information and belief, conducts business in Aspen, Colorado directly or through Jerome Property and/or Jerome Ventures. 8. Defendant DRW   Real   Estate   Management   I   LLC,   (“DRW   Management”)   is   a   Delaware limited liability company that is not registered with the Colorado Secretary of State to Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 3 of 25 conduct business in Colorado, but upon information and belief, conducts business in Aspen, Colorado directly or through Jerome Property and/or Jerome Ventures. 9. The principal office address for DRW Management is 160 Greentree Drive, Ste. 101, Dover, Delaware 19904. 10. Defendant DRW   Holdings,   LLC,   (“DRW   Holdings”)   is a Delaware limited liability company that is not registered with the Colorado Secretary of State to conduct business in Colorado, but, upon information and belief, conducts business in Aspen, Colorado directly or through Jerome Property and/or Jerome Ventures. 11. Property. Upon information and belief, DRW Management is the manager of Jerome 12. Upon information and belief, Wilson, or entities controlled by Wilson, is a manager and/or member of Jerome Ventures. 13. Upon information and belief, Wilson, or an entity controlled by Wilson, is a manager and/or member of Jerome Property. 14. Upon information and belief, DRW Investments funded and/or was otherwise involved in the purchase of a Senior Mortgage Loan on the Hotel Jerome (defined below). 15. Upon information and belief, DRW Management funded and/or was otherwise involved in the purchase of a first mortgage note on the Hotel Jerome defined, infra. ¶24. 16. Both Jerome Ventures and Jerome Property have a principal office street address of 330 E. Main Street, Aspen, Colorado 81611, which is also the physical address of the Jerome Hotel. 17. Both Jerome Ventures and Jerome Property have a principal office mailing address of 540 W. Madison Street, Ste. 2500, Chicago, Illinois 60661; and a registered agent of Oates, Knezevich, Gardenswartz, Kelly & Morrow, P.C., 533 East Hopkins Avenue, 3rd Floor, Aspen, Colorado 81611. 18. Upon information and belief, Wilson is the manager of DRW Holdings. 19. Upon information and belief, DRW Management is the manager of DRW Investments. 20. Upon information and belief, Wilson is one of the managers of DRW Management. 21. The principal office addresses for DRW Holdings and DRW Investments is 540 West Madison Street, Ste. 2500, Chicago, Illinois 60661. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 4 of 25 22. The registered agent for DRW Investments and DRW Management is Michael S. Roberts, 55 W. Monroe Street, Ste. 1700, Chicago, Illinois 60603. 23. The registered agent for DRW Holdings is Dan Glassenberg, 540 W. Madison Avenue, Ste. 2500, Chicago, Illinois 60661. II. THE PROPERTY AND HOTEL JEROME 24. Jerome Property is the current owner of certain improved real property located at 330  E.  Main  Street,  Aspen,  Colorado,  commonly  known  as  the  Hotel  Jerome  (“Hotel  Jerome”  or   “Hotel”),  and  described  as: City and Townsite of Aspen, Colorado, being all of Lots A, B, C, D, E ,F, G, H, I, O, P, Q, R, S, and the East 20.00 feet of Lot N, all in Block 79, together with the East 170.00 feet of the Alley in said Block 79, Vacated by Ordinance No. 1 (Series of 1961) of the City of Aspen, Colorado, according to the Hotel Jerome Lot Line Adjustment and Subdivision Exemption Plat filed June 12, 1991 at Reception No. 331521, In Plat Book 26 at Page 52. 25. Jerome Property was the purchaser in or around August 2009 of certain senior debt or Senior Mortgage Loan on the Hotel Jerome then held by Lehman Brothers Bank, FSB (“Senior  Mortgage  Loan”).   26. Jerome Property thereafter (July 14, 2010) became the owner of the fee through various foreclosure proceedings, litigation and deals. 27. The Hotel Jerome was originally constructed in 1889. It is an iconic and historic property in Aspen. 28. The Hotel Jerome has been renovated, upgraded and operated as a high-end, luxury  hotel  by  various  owners  since  the  1980’s. 29. Jerome Property is also the owner of certain improved real property located at 220 E. Main Street,  Aspen,  Colorado,  commonly  known  as  the  “Cortina  Lodge,”  and  described  as: Lots P and Q, Block 73, City and Townsite of Aspen 30. The Cortina Lodge is used as employee housing for the Hotel Jerome. III. JURISDICTION AND VENUE Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 5 of 25 31. 32. and 98(c)(4). Jurisdiction is proper in this Court pursuant to C.R.S. § 13-1-124(a) and (c). Venue is proper in Pitkin County pursuant to C.R.C.P. 98(a), 98(c)(1), 98(c)(2), IV. A. GENERAL ALLEGATIONS ASPEN OWNER’S DEBT STRUCTURE 33. Upon information and belief, in approximately early 2007, LCP- Elysian Aspen Owner,  LLC  (“Aspen  Owner”)  acquired  the  Hotel  Jerome,  with  a  purchase  financed  by  a  loan  of   over $47,000,000. 34. Morgan  Stanley  Capital,  Inc.  (“Morgan  Stanley”)  loaned  the  $48,000.00  of  Aspen   Owner; and Aspen Owner provided a promissory note and Deed of Trust to Morgan Stanley, encumbering the Hotel Jerome. 35. Upon information and belief, Morgan Stanley requested that Aspen Owner consent   to   a   modification   of   the   Mortgage   Loan   to   facilitate   Morgan   Stanley’s   sale   of   the Mortgage Loan, and/or Aspen Owner had done this as part of an effort to restructure its debt. 36. Morgan Stanley requested that the principal sum of the Mortgage Loan be reduced   by   $10   million   using   the   proceeds   of   a   $10   million   mezzanine   loan   (the   “Mezzanine Loan”)   to   be   made   by   Morgan’s   affiliate,   Morgan   Stanley   Mortgage   Capital   Holdings,   LLC   (“Morgan  Holdings”)  to  LCP-Elysian  Aspen  Mezz,  LLC  (“Aspen  Mezz”). 37. The Mezzanine Loan was evidenced by that certain Mezzanine Promissory Note, dated October 31, 2007, delivered by Aspen Mezz to Morgan Holdings. 38. Prior to that time, in early 2008, $10 million of the original Mortgage Loan had been  split  off  as  a  Mezzanine  Loan,  acquired  by  Brickman  Aspen,  LLC  (“Brickman”),  an  entity   established for the purpose of acquiring the Mezzanine Loan in this amount made by LCPElysian Aspen Mezz, LLC (an entity established for that purpose). 39. Upon information and belief, either on or shortly after October 31, 2007, Morgan Holdings assigned the Mezzanine Loan and all related Mezzanine Loan documents, a pledge agreement, to Brickman Aspen, LLC. 40. Upon information and belief, in January 2008, Morgan Stanley assigned the Senior Mortgage Loan and all related mortgage loan documents to Lehman Brothers Bank, FSB (“Lehman”). Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 6 of 25 41. In September   2008,   Lehman’s   parent   company,   Leman   Brothers   Holdings,   Inc.,   (“Lehman  Brothers”)  filed  the  largest  bankruptcy  proceedings  in  U.S.  History. B. LATSKO’S INITIAL EFFORTS TO PURCHASE HOTEL JEROME 42. In late 2007 and early 2008, Latsko (with some involvement of a business associate  Mark  Hunt  (“Hunt”))   entered  into  in   negotiations  to   purchase  the  Hotel   Jerome  from   then-fee-simple owner Aspen Owner. 43. On or about January 16, 2008, Latsko, by and through an entity he controlled, L.I.   Acquisitions,   LLC   (“L.I.”),   entered   into   a   “Purchase   and   Sale   Agreement,   Hotel   Jerome,   Aspen,  Colorado”    (“PSA”)  with  Aspen  Owner  for  purchase  of  the  Hotel  Jerome.   44. The purchase price in the PSA was $75,000,000. 45. In connection with his efforts to purchase the Hotel, L.I./Latsko paid an earnest money deposit of $5 million in two installments to Aspen Owner. 46. The   first   installment   of   $1   million   was   paid   from   “Latsko   Properties,   LLC”   to   Aspen Owner on or about January 16, 2008. 47. A copy of this check is attached as EXHIBIT “1”. 48. The second  installment  of  $4  million  was  paid  from  “Latsko  Properties,  LLC”  to   Aspen Owner on or about January 30, 2008. 49. A copy of this check is attached as EXHIBIT “2”. 50. On May 13, 2008, L.I. and Aspen Owner entered into a First Amendment to Purchase and Sale Agreement. EXHIBIT “3”. 51. Bear  Stearns’  collapse  occurred in March 2008. 52. Lehman Brothers collapsed with its September 15, 2008, bankruptcy filing. 53. In the banking crisis, Latsko and L.I. were thus unable to secure the financing necessary to close the PSA for the Hotel Jerome. 54. Latsko, by and through L.I., entered into and executed a Termination Agreement with Aspen Owner on October 16, 2008, which terminated the PSA and acknowledged Aspen Owner’s  right  to  retain  Latsko/L.I.’s  $5  Million    earnest  money  deposit.   Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 7 of 25 55. In a separate Option Agreement, also entered into on October 16, 2008, L.I. was provided with an exclusive right to purchase the Hotel Jerome, by giving notice any time before May 1, 2009. L.I. would have been required to close within two days of such notice. C. PURCHASE JEROME OF LEHMAN BROTHERS SENIOR MORTGAGE LOAN ON HOTEL 56. Latsko’s  efforts  and  due  diligence  in  late  2007  and  throughout  2008  to  purchase   the Hotel Jerome had enabled him to acquire business connections and knowledge of the Hotel Jerome, its ownership, Aspen   Owner’s   and   Aspen   Mezz’s   debt   structure,   intercreditor   agreements,  individuals  involved  and  problems  with  the  Aspen  Owner’s  debt  service. 57. Based  on  Latsko’s  knowledge  and  contacts,  he  had  learned  that  Lehman  was  the   holder of the Senior Note. 58. By early 2009, as Lehman Brothers was in bankruptcy proceedings, Latsko began seeking   a   buyer   for   the   first   mortgage   note   on   the   Hotel   Jerome   (“Senior   Mortgage   Loan”).   Aspen  Owner’s  debt  had  had  an  original  principal  amount  of  approximately  $48  million  under  a   single mortgage but was not less in part due to the Mezzanine Loan. 59. Due to his knowledge and connections, knowledge of Trimont Real Estate Advisors,  the  bankruptcy  processes  for  Lehman  Brothers  and  other  factors,  including  L.I.’s  PSA   and  Latsko’s  own  risk  of the $5 million in earnest money, Latsko entered into discussions with Lehman Brothers and Lehman for their consideration of a transaction to purchase some or all the loans on the Hotel. 60. Lehman Brothers was shedding assets as part of its Chapter 11 Bankruptcy 61. On March 13, 2009, Latsko, through an entity called Astor Financial, sent a proposal to Lehman Brothers to purchase the Senior Mortgage Loan for $23 Million. 62. A   sale   of   the   Lehman   Brother’s   Senior   Mortgage   Loan   was   not   advertised   or   otherwise being offered by Lehman Brothers or Lehman. 63. Again,  Latsko  knew  of  Lehman  Brother’s  potential  interest  due  to  his  contacts  in   the industry and at Lehman Brothers, and a knowledge he had gained from his previous attempts to purchase the Hotel Jerome. He also had his then current Option Agreement. None of the Defendants had this knowledge. 64. Latsko also understood from his own knowledge and his contacts that Lehman Brothers or any subsequent owner(s) of the Senior Mortgage Loan could have occasion to foreclose on Aspen Owner and the Jerome Hotel Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 8 of 25 65. Negotiating a possible release or recovery of the $5 million in earnest money was also a consideration. 66. Latsko was also acquainted with an executive at Lehman Brothers handling the Senior Mortgage Loan, who had been introduced to Latsko by another Lehman Brothers executive  who  was  Latsko’s  acquaintance. 67. On May 27, 2009, Lehman Brothers advised Latsko that sale of the Senior Mortgage Loan as the senior debt on the Hotel Jerome had been approved, but at the price of $29 Million. 68. Latsko  first  approached  David  Colburn  (“Colburn”)  to  fund  the  $23  Million  of  the   $29 Million purchase price at 6% current interest and 7% accrued interest. 69. Colburn was a principal in Bixby Bridge Capital, LLC, which is an entity that purchases performing and non-performing debt, acquires distressed real estate and originates bridge loans. 70. Latsko advised Coburn that subject to prompt due diligence the deal for the Senior Mortgage Loan would be funded with a $23 million loan in equity. 71. Latsko began seeking other lenders or possibly other investors to help fund the Senior Mortgage Loan purchase. 72. Latsko also then approached Wilson regarding an investment to fund a portion of the Senior Mortgage Loan purchase. 73. Wilson is the founder of DRW Trading Group, a company that trades in, among other things, commodities, exchange-traded fixed-income futures and options. DRW Trading is a successful and lucrative enterprise. 74. Wilson had begun to invest in commercial real estate, including, primarily deals made known and brought to him by Latsko and Hunt. 75. 16 years. According to Wilson, at the time Latsko and Wilson had known each other about 76. According to Wilson, at the time Hunt and Wilson had known each other about 7 years. 77. According to Wilson, Latsko and Hunt (through their business entities that were either owned by Hunt or Hunt and Latsko) had been involved with Wilson in the acquisition of close to ten properties before the Hotel Jerome. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 9 of 25 78. According to Wilson, in almost all cases they had bought non-performing notes or loans from banks and had done a deed-in-lieu processes to gain ownership of those properties. 79. According to Wilson, Hunt and Lastko would   “come   back   in”   to   the   deals   as   minority owners of the entity that took ownership of a property. 80. ventures. According to Wilson, an entity, which Wilson would control, would manage these 81. According   to   Wilson,   Hunt   and   Latsko   would   have   an   “economic piece”   in   the   deal. 82. When   Wilson   described   Latsko’s   piece   as   “small”   in   a   December   2010   deposition, he had already failed to honor his commitments to Latsko and would subsequently attempt to freeze Latsko out of the Hotel Jerome transactions and the entities formed to take ownership and its management. 83. Wilson and defendants have breached their agreement with Latsko. In fact, as of the  filing  of  the  law  suit,  Lastko  has  never  received  an  “economic  piece”  or  “a  single”  dollar.   84. Wilson knew who had paid the $5 million earnest money for the prior 2008 PSA. 85. This is the same $5.0 million in earnest money Wilson told Latsko (and Hunt) was  in  “La  la  land.”  EXHIBIT “4”. 86. Wilson  has  now  forgotten  that  Latsko  “fought  back”  with  a  deal  that  has  lead  to   the Hotel Jerome’s  acquisition  by  Jerome  Property. 87. Wilson  has  now  failed  to  recognize  Latsko’s  “economic  piece.”   88. Wilson does recall that Latsko did indeed bring the opportunity to buy the Senior Mortgage Loan to him. 89. Wilson does recall that there was an opportunity to buy the Senior Mortgage Loan at a discount from Lehman Brothers. 90. He does recall that the price was less than $30 million, because Lehman Brothers had the Senior Mortgage Loan Note which was in default and Lehman Brothers was in bankruptcy proceedings. 91. Wilson does recall that Latsko believed that the Senior Mortgage Loan Note could be  acquired  for  less  than  $30  million,  but  does  not  recall  Latsko’s  Astor  Street’s  opening  offer  of   $23 million. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 10 of 25 92. Wilson was familiar with the Hotel Jerome and had stayed there before. Wilson was interested in the Hotel Jerome opportunity that Latsko had fostered. 93. Wilson thought such a deal made sense and that there would be an opportunity to do a number of distressed asset purchases in the recession environment. 94. Wilson   wanted   to   “institutionalize”   this   opportunity   and   run   this   type   of   deal   through DRW entities, including DRW Investments, DRW Holdings and DRW Management. 95. Wilson   got   Hans   Pusch   (“Pusch”).   Pusch   was   employee   and/or   executive   at   DRW. 96. In or about May 2009, Wilson agreed to fund the other $6 million of the Senior Loan purchase at twenty-five  percent  interest.  Wilson’s  terms  by  late  May  2009  were  $6  million,   25% preference of cash, 55% of deal, 45% of deal to Latsko and Hunt. 97. Latsko and Wilson planned to create a limited liability company for the purpose of purchasing the Senior Mortgage Loan, in which both Latsko and Wilson would be members. 98. Wilson   then   asked   if   he   could   fund   the   entirety   of   the   Senior   Mortgage   Loan’s   purchase; Wilson stated to Latsko that the loan terms from Coburn were too expensive. 99. After Wilson inquired as to if he could fund the entire amount for the loan, Latsko and Wilson then agreed that Wilson would fund the entirety of the Senior Mortgage Loan purchase at the same interest rate—seven percent (7%)—as Colburn had agreed to fund the $23 Million. 100. Latsko spearheaded and was involved in every aspect of negotiation for the Senior Mortgage Loan from the seller of intent through its purchase i.e., from Lehman Brothers and Lehman, from inception to ultimate execution and the funding of a $1 million deposit. 101. From the outset, the agreement between Wilson and Latsko was for Latsko to be a participant  (have  “an  economic  piece”)  in  the  venture  to  purchase  the  Senior  Mortgage  Loan;;  and   which entity would have the potential to own the Hotel Jerome. 102. On or around June 9, 2009, according to the Lehman Brothers, Aspen Owner and Aspen Mezz defaulted on both the Senior Mortgage Loan and the Mezzanine Loan (these defaults would be disputed by Aspen Owner). 103. On June 17, 2009, in an e-mail   exchange   regarding   Wilson’s   $6   million     investment in the Senior Mortgage Loan purchase, Wilson stated to Latsko that, while the $5 million     earnest   money   from   Latsko’s   earlier   purchase   attempt   was   in   “lala   land,”   Latsko   and   Hunt  would  “surely  recoup  [their]  $5  mm  in  short  order!!”     104. A copy of the June 17, 2009, e-mail exchange is attached as EXHIBIT “5”. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 11 of 25 105. On June 19, 2009, Wilson e-mailed Latsko about the purchase transaction for the Senior Mortgage Loan, expressing  a  concern  that  there  be  a  “decent  upside  for  everybody.”   106. A  copy  of  Wilson’s  June  19,  2009,  e-mail is attached as EXHIBIT “6”. 107. On July 8, 2009, Latsko e-mailed Wilson about funding the purchase of the Senior Mortgage Loan. 108. Wilson responded and offered  to  help  “you  guys  buy  back  any  loan  at  a  discount   as  long  as  everything  makes  sense.”  Wilson  added:  “I  would  just  want  to  ensure  the  incentives   are  aligned  across  the  board.” 109. A copy of the July 8, 2009, e-mail exchange is attached as EXHIBIT “7”. 110. Latsko continued to work with the Lehman Brothers executives on the Senior Mortgage Loan purchase. 111. On July 21, 2009, the parties, i.e., Wilson, Hunt and Latsko agreed that Latsko and Hunt would own a forty percent share of the entity that would purchase the Senior Mortgage Loan and could potentially own the Hotel Jerome through a potential foreclosure based on defaults by Aspen Owner and Aspen Mezz. EXHIBIT “8”. 112. Wilson would own sixty percent. 113. On July 23, 2009, Latsko executed the Purchase and Sale Agreement. Wilson made a loan to L.I. of $1 million; i.e. on the same day entered into a purchase and sale agreement to acquire the Senior Mortgage Loan from Aurora Bank, as successor to Lehman Brothers, for $29 Million. 113. Wilson wired the $1.0 million and wanted Latsko to sign a note for the entire $1.0 million, and Latsko said it should be 40% representing his ownership interest. 114. According to Wilson, there is a secured promissory note in the amount of $1 million from him individually to L.I. There was to be a personal guarantee from Latsko. This was part of a structure contemplated by the parties to put the deal in a DRW entity and a structure whereby Wilson would end up with a majority of such an entity and Latsko would have a minority piece. 115. Due diligence was conducted by the purchasing team, headed by Latsko, with the assumption of their counsel Katten Muchen Rosenman LLP (later counsel for Jerome Property, LLC). Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 12 of 25 116. On or about August 25, 2009, Wilson formed Jerome Property, which was formed to act as the purchasing entity of the Senior Mortgage Loan. 117. On August 28, 2009, Wilson e-mailed Latsko, Hunt and Pusch and their counsel about an auction of the Mezzanine Loan and  told  them,  “Just  wanted  to  ‘keep  us  in  the  loop.’” 118. On August 28, 2009, Latsko sent an e-mail to Wilson with suggestions for the structure of the LLC that was to own the Hotel Jerome. Wilson replied that he did not see the need for limited partnerships being members of Jerome Property. 119. A copy of the August 28, 2009, e-mail is attached as EXHIBIT “9”. 120. An   August   29,   2009,   document   has   a   footer:   “DRW   Holding/Real   Estate/HuntLastko   Master   Transaction/Entity”. According to Wilson, various deals have been done by entities such as those outlined in this document with Latsko and Hunt. 121. In the essence of time, on August 31, 2009, Jerome Property took an assignment of the PSA [Options Agreement] from L.I. as a wire was needed to fund the $29 million. EXHIBIT “10”. 122. Wilson does recall that Latsko had been instrumental in acquiring the Senior Mortgage  Loan  and  had  done  the  leg  work  to  put  it  in  place  and  create  a  “construct”  to  purchase   it. 123. Wilson does recall that when he and DRW entities decided to step in with money that they would consummate the transaction with or through a DRW entity. 124. On August 31, 2009, Jerome Property closed on the acquisition Senior Mortgage Loan for $29 million. 125. After the closing, as a successor to Lehman, immediately used a $1.5 million escrow fund to pay down the principal on the $6 million payment by Wilson. 126. In an e-mail exchange dated August 31, 2009, Latsko provided information to Wilson regarding the amount of legal fees incurred in the purchase of the Senior Mortgage Loan. 127. A copy of the August 31, 2009, e-mail exchange is attached as EXHIBIT “11”. 128. On September 2, 2009, Pusch e-mailed Latsko about current escrow balances for the Jerome Hotel. 129. On September 17, 2009, Latsko e-mailed Pusch regarding potential issues resulting from the purchase of the Senior Mortgage Loan. 130. A copy of the September 17, 2009, e-mail exchange is attached as EXHIBIT “12”. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 13 of 25 131. On September 28, 2009, Latsko and Pusch traded e-mails. Latsko asked about interest rates  and  getting  paid  “2.1  for  my  40%...”  Pusch  responded  that  with  the  current  60/40   split  with  the  loan  paid  off  Latsko  would  “get  approximately  2.4,”  and  if  the  structure  is  80/20  at   the  lower  rate  Latsko  would  “get  1.6.”  EXHIBIT “13”. 132. Pusch was  attempting  to  renegotiate  Latsko’s  ownership  percentage. 133. In an October 6, 2009, e-mail from Pusch to Hunt and Wilson, Pusch spoke to the terms for the ownership of the Hotel deal. Pusch outlined an 80% -20% equity structure and said that if Jerome Property did become the new owner (which it did become), it would become a subsidiary of   a   DRW   entity   and   be   subject   to   an   operating   agreement   being   created   “with   the   other  deals.”  EXHIBIT “14”. 134. Those  “Other  deals”  meant  deals  with  Hunt,  Latsko  and  Wilson.   135. Wilson fully recognizes that Latsko brought the Hotel Jerome deal to them. Despite feeling obligated to compensate Latsko, Defendants have not provided anything of value, such as membership in Jerome Property or money. D. JEROME PROPERTY’S FORECLOSURE LODGE ON THE JEROME HOTEL AND CORTINA 136. Aspen   Owner’s   defaults   of   the   Senior   Mortgage   Loan   and   Mezzanine   Loan   continued. Jerome Property—not Lehman Brothers/Aurora—was by now the owner of the Senior Mortgage Loan. 137. Jerome Property was the owner of the debt and was now clear to acquire the Hotel by means of a foreclosure. 138. On October 23, 2009, Jerome Property initiated foreclosure proceedings in Pitkin County, Colorado, District Court against Hotel owner LCP-Elysian due to LCP-Elysian's failure to pay its loan obligations on the Mortgage Loan. The proceedings were styled Jerome Property, LLC v. LCP-Elysian Aspen Owner, LLC, Pitkin County, Colorado District Court case number 2009CV314  (“Foreclosure  Action”). 139. In its Verified Response to Motion for Order Authorizing Sale of Real Estate by the Public Trustee Pursuant to Colo. R. Civ. P. 120 filed in an attempt to prevent the foreclosure, Aspen  Owner  acknowledged  that  Latsko  negotiated  Jerome  Property’s  purchase  of  the  Mortgage   Loan. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 14 of 25 140. In that response, Aspen Owner turned its full wrath directly on Latsko as he had been a potential purchaser through L.I. before the great recession at $75 million. Latsko was now poised through his efforts to acquire this asset for $29 million. 141. Aspen Owner attacked Latsko for obtaining the Senior Mortgage Loan Note at half the price of the debt and a third of the 2007/8 purchase price in the PSA. 142. Aspen   Owners’   lawyers   improperly   included   scandalous   attacks   regarding   a   teenage indiscretion in a Rule 120 response. 143. Pusch sent Latsko  the  press  clipping  about  Aspen  Owner’s  response,  and  he  said   sarcastically,  “Merry  Christmas.”     144. On November 10, 2009, Latsko was involved in one of many attorney client privileged e-mail communications with Pusch and counsel regarding issues to be resolved prior to resolution of the foreclosure on the Hotel and Cortina Lodge. 145. In early November 2009, Aspen Owner commenced an action in the Supreme Court of the State of New York against Jerome Property and Brickman, styled LCP-Elysian Aspen Owner, LLC at al v. Brickman Aspen, LLC, et   al;;   Index   No.   602805/09   (“New   York   Action”). 146. In the New York Action, Aspen Owner sought, among other things, to enjoin the Foreclosure Action then pending in this court. 147. The New York Action would expand to include claims about the Mezzanine Loan and an Intercreditor Agreement. Brickman would become a party. 148. Pusch was deposed in the New York Action on November 12, 2010. 149. Wilson was deposed in the New York Action on December 7, 2010. 150. Pusch sought input and information from Latsko about Aspen Owner and the investment   structure   of   it,   so   that   a   “deed-in-lieu”   and   settlement   with   Aspen   Owner   could   be   explored. 151. On or about December 9, 2009, Jerome Property and Aspen Owner entered into a comprehensive agreement by which Aspen Owner provided a deed-in-lieu of formal foreclosure for the Hotel Jerome in exchange for $500,000.00 and Jerome Property's forgiveness of all debts under the Mortgage Loan. 152. As part of that agreement, Jerome   Property’s   “affiliate”   Jerome   Ventures   was   formed and conveyed the deed-in-lieu. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 15 of 25 153. Latsko was involved in the decision-making leading up to the deed-in-lieu agreement with Aspen Owner, and other aspects of the Settlement Agreement. 154. As part of the deed-in-lieu  agreement,  Aspen  Owner’s  released  Latsko  and  Mark   Hunt as predecessors in interest. 155. On December 9, 2009, Pusch e-mailed Latsko, Hunt, Wilson and their counsel: “We  closed  on  the  Jerome  Deal”  (emphasis  added).   156. On December 18, 2009, Hans Pusch e-mailed Latsko asking whether Latsko had spoken to anyone regarding financing for the renovation on the Hotel and Cortina Lodge. 157. A  copy  of  Pusch’s  December  18,  2009,  e-mail is attached as EXHIBIT “15”. 158. In December 2009, Pusch was asking Latsko if he had spoken to anyone about financing the Hotel Jerome [December 18, 2009 e-mail]. 159. Pusch would regularly rely on Latsko for information and direction on various aspects of the acquisition. 160. Latsko dealt with issues relating to the Mezz Loan in early 2010. 161. On January 27, 2010, Latsko and Wilson engaged in an e-mail exchange regarding  the  amount  of  the  attorneys’  fees  accrued  in  the  acquisition  of  the  Hotel  and  Cortina   Lodge, how they should be paid, and who should pay them. 162. A copy of the e-mail exchange is attached as EXHIBIT “16”. 163. On January 27, 2010, as part of an e-mail  chain  about  Katten  Muchin  Rosenman’s legal bills for the Hotel Jerome deal, Wilson said he was annoyed with the legal bill and that if he paid   the   bill   without   a   discount   he   would   never   use   that   firm   again   and   “I   will   charge   you   [Latsko] directly  for  part  of  [the  bill]”. 164. In February 2010, Latsko was personally dealing with Brickman, which was also a party in the New York Action and had claims about the Mezzanine Loan and an Intercreditor Agreement. He so advised Wilson. 165. On February 15, 2010, Wilson advised Latsko and Hunt that Aspen Owner would not be exercising an option. [?] 166. The Pitkin County Public Trustee conducted a sale of the Hotel Jerome and Cortina Lodge. The only entity to bid on the Hotel Jerome and Cortina Lodge was Jerome Property. 167. On or about July 14, 2010, the foreclosure process was completed and the Public Trustee of Pitkin County issued a confirmation deed to Jerome Property. As a result of the Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 16 of 25 completion of the foreclosure process, Jerome Property became the owner of the Hotel and Cortina Lodge. E. OWNERSHIP AND RENOVATION OF THE HOTEL AND CORTINA LODGE 168. After the execution of the deed-in-lieu agreement and confirmation of Jerome Property ownership, Latsko was engaged in the efforts to renovate and manage the Hotel Jerome. 169. Numerous media accounts regarding Jerome Ventures' acquisition of the Hotel and its renovation named Latsko as an owner of the Senior Mortgage Loan and/or property. 170. On March 3, 2010, Latsko told Pusch and Wilson that he was meeting with Ralph Lauren and designers; that he was working on proposals for an  “anticipated  budget”;;  they  were   looking at design issues for the lobby, bars, halls and outdoor pool areas; that he was working on “boards  and  elevations”  for  April  2010.   171. Pusch   wrote   Latsko   on   March   29,   2010,   to   discuss   the   architect’s   preliminary   project scope and planning issues. 172. Pusch continued to communicate with Latsko, who was an integral part of the redevelopment team. 173. On June 25, 2010, Latsko asked Pusch if Pusch would set the dates for certain transactions; when Pusch asked why, Latsko said so he could better understand the deal [May 18, 2010]. 174. Latsko continued to work with Ralph Lauren and designers and to keep Pusch advised of his renovation and design efforts. 175. In a March 2010, Aspen Times article, Aspen Hotel Jerome quietly changes hands, Latsko is identified as a partner (based on Court documents) and Hunt as an investor in “Jerome  Ventures.”   176. One such article, from the Aspen Business Journal, dated April 16, 2012, names the  ownership  group  of  the  Hotel  Jerome  as  “Don  Wilson,  Jr.,  Fred  Latsko,  and  Mark  Hunt”. 177. 178. owners. The April 16, 2012, Aspen Business Journal article is attached as EXHIBIT “17”. This is because the three individuals consistently held out that they were the 179. In late February or early March 2010, Latsko began meeting with designers, including from Ralph Lauren, regarding the renovation of the Hotel. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 17 of 25 180. Latsko spent approximately $50,000 to $100,000 of his own money working with the designers and flying them to Aspen. 181. Latsko consulted and worked with Aspen based land-use planner Sunny Vann, AICP, regarding City of Aspen approvals and permits for planned renovations to Hotel Jerome and Cortina Lodge renovations. 182. Latsko hired Aspen architects Poss Architecture + Planning, P.C., to design the renovation on the Hotel Jerome and Cortina Lodge. 183. Latsko worked closely with the architects and coordinated with Pusch on the design and renovations for the Hotel Jerome. 184. Latsko was involved with the architect who was in the permitting process for the renovations and selection of a general contractor. 185. Latsko participated in the decisions regarding possible tenants of the entire hotel. 186. Latsko also approached Tony DiLucia. DiLucia had been general manager of the Hotel from 1992 to 2007 and was a key potential asset to its operation. Latsko spoke to DiLucia about returning to manage the renovated Hotel. 187. capacity. DiLucia ultimately agreed to return as the GM and is currently serving in that 188. By the end of 2010, Wilson began to shut Latsko out of the management and decision-making   for   the   Hotel   Jerome   and   Cortina   Lodge,   despite   Latsko’s   requests   to   stay   involved. 189. Wilson and Hunt began to do other real estate deals together. 190. Upon information and belief, Hunt and Wilson have been involved in the purchase  of  the  “Gap”  building  in Aspen. 191. Pusch and Latsko were active throughout 2010 in dealing with the renovation of the Hotel Jerome, and issues related to designers, architects, builders and land planners. 192. In a December 31, 2010, e-mail, Latsko requested that Pusch put  him  back  on  “emails and meetings having to do with the property so that we can stay on the same page moving forward  to  develop  a  proper  plan”. 193. A copy of the December 31, 2010, e-mail is attached hereto as EXHIBIT “18”. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 18 of 25 194. Pusch responded that he would be   happy   to   include   Latsko   and   said   “I   didn’t   realize  you  wanted  to  be  involved.”  Id. 195. In   April  20,  2011,  Pusch  asked   Latsko   to   sign  an  affidavit   in   Jerome  Property’s   lawsuit against the City of Aspen regarding a transfer tax. 196. Pusch had told the City of Aspen  that  Latsko  “did  not  have  an  interest  in  any  of   the   related   entities…” i.e., Jerome Property, Jerome Ventures, DRW Investments or DRW Holdings. 197. Latsko agreed that this was technically true and stated in an e-mail dated April 26, 2010,  “this  is  very  specifically  correct  that  I  am  not  documented  in  the  paper  work  of  the  LLC’s   but that was and still is not the intention. I feel comfortable signing with that being acknowledged.” 198. In March 2012, Latsko requested of Pusch a room at the Hotel Jerome and for k- 1’s. 199. Latsko copied Pusch on an e-mail  reservation  string  and  said,  “I  didn’t  realize  that   as  an  owner  I  was  going  to  be  charged.” 200. On April 15, 2012, Latsko asked Pusch why he was not included in a management group meeting. 201. On May 17, 2012, Latsko e-mailed Wilson and mentioned the Hotel Jerome deal and  has  limited  ownership  “being  ignored.” 202. In August 2012, the Hotel Jerome was closed for a major remodel. 203. On June 15, 2012, in an e-mail to Wilson, Latsko wrote to Wilson about ownership structure. Wilson  responded,  “Please  tell  me  what  you  think  the  terms  are.” 204. Wilson admits that Latsko has not received consideration and that Latsko “brought   the   deal   to   our   attention”   and   was   heavily   involved   in   the   negotiation   with   Lehman   Brothers. [DRW p. 51] 205. Wilson admits at the very least that there is a general understanding with Latsko that they will receive some value. 206. Wilson believes it is appropriate to compensate Latsko, and admits that they have a  general  understanding  that  Latsko  is  “going  to  get  something.” 207. By  the  time  of  the  Hotel’s  re-opening celebration in December 2012, Latsko was required to pay for his own room at the Hotel Jerome to attend the celebration. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 19 of 25 IV. CAUSES OF ACTION FIRST CLAIM FOR RELIEF (BREACH OF CONTRACT AGAINST WILSON) 208. Plaintiff incorporates by reference the allegations contained in paragraphs 1 through 207 above as though fully set forth herein. 209. Latsko has an enforceable agreement with Wilson in his individual capacity, as well as member/manager of DRW Holdings, DRW Management, and/or DRW Investments. 210. Pursuant to this agreement, Latsko shares in a forty-percent shareholder in the venture to purchase the Senior Mortgage Loan and resulting ownership of the Hotel Jerome and Cortina Lodge. 211. As part of the agreement that Latsko owns a share of forty-percent interest in the business venture, he was to own forty percent in the Hotel and Cortina Lodge. 212. Latsko had been heavily involved with the management of and decision-making regarding the Hotel and Cortina Lodge. 213. Since Wilson and Pusch begun to exclude Latsko in early 2012. 214. There  is  ample  consideration  for  Latsko’s  forty-percent stake in the Hotel Jerome. 215. Latsko invested and lost $5 million, but continued to pursue acquiring the Hotel. He became familiar with the Hotel and its debt structure. 216. Latsko aggressively pursued Lehman Brothers and obtained a heavily discounted purchase price for the Senior Mortgage Loan. 217. Latsko   found   and   created   the   “construct”   and   the   opportunity   to   purchase   the   Senior Mortgage Loan, Latsko brought in Wilson to invest. 218. Latsko structured and facilitated the purchase of the Senior Mortgage Loan; he provided his expertise, contacts, funding, and management to acquisition, the renovation and operation of the Hotel and Cortina Lodge. 219. Wilson alone or by and through the DRW entities has breached his agreement with  Latsko  by,  among  other  things,  (i)  failing  to  ensure  Latsko’s  participation  as  a  member  in   Jerome Property and/or Jerome Ventures or the entities that are members of same, (ii) failing to recognize Latsko as a forty-percent owner of the business venture, and (iii) recently shutting Latsko out of the management of the Hotel and Cortina Lodge. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 20 of 25 220. Wilson alone or by and through the DRW entities has breached the agreement by failing to provide Latsko with any share of the profits or benefits of ownership of the Hotel and Cortina Lodge and/or participation in Jerome Property and Jerome Ventures. 221. As a result of the Wilson breaches of the agreement with Latsko, Latsko is entitled to monetary damages, which Latsko requests be awarded in an amount to be determined at  trial,  plus  attorneys’  fees  and  costs.   SECOND CLAIM FOR RELIEF (BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING AGAINST WILSON) 222. Plaintiff incorporates by reference the allegations contained in paragraphs 1 through 207 as if fully set forth herein. 223. fair dealing. Under Colorado law, Wilson owes Latsko an implied covenant of good faith and 224. By his acts and conduct described above and herein, the Wilson Defendants have breached the implied duty of good faith and fair dealing by, among other things, misleading Latsko with false representations and warranties. 225. Wilson has failed and refused to act in good faith under their agreement that Latsko is a forty-percent shareholder in the venture to purchase the Senior Mortgage Loan and resulting ownership of the Hotel Jerome and Cortina Lodge, and otherwise breaching Wilson Defendants’   core   promises,   representations   and   warranties   about   the   deal Latsko created and venture to purchase the Mortgage Loan and resulting ownership and operation of the Hotel and Cortina Lodge. 226. As a direct and proximate result of Wilson’s breaches of the implied covenant of good faith and fair dealing, Latsko is entitled to damages in an amount to be determined by the Court. THIRD CLAIM FOR RELIEF (DECLARATORY JUDGMENT PURSUANT TO C.R.C.P. 57 AND C.R.S. §§ 13-51-101, ET SEQ., AGAINST WILSON, DRW HOLDINGS, DRW MANAGEMENT, AND DRW INVESTMENTS) 227. Plaintiff incorporates by reference the allegations contained in paragraphs 1 through 207 above as though fully set forth herein. 228. Latsko seeks relief pursuant to C.R.C.P. 57 and C.R.S. §§ 13-51-101, et seq. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 21 of 25 229. Based on the above allegations regarding the Jerome Agreement between Latsko and the Wilson Defendants, it is necessary for the Court to declare the rights and obligations of the parties with respect to and under the agreement, including as follows: (a) Determining that the agreement is supported by consideration and is a valid, enforceable contract; (b) Determining that Latsko owns a forty-percent share in any and all entities that own the Jerome and Cortina Lodge; (c) Determining that Latsko owns a forty-percent share in the Hotel Jerome and Cortina Lodge; (d) Determining that, as a shareholder in the ownership entities and the Hotel Jerome and Cortina Lodge themselves, Latsko has the right to participate in the management and decision-making regarding the Hotel and Cortina Lodge; (e) Determining that Latsko has complied with the agreement; (f) Determining that the Wilson entities are jointly and severely responsible with respect to all declaratory relief as may be granted; and (g) Determining such other reasonable and necessary actions are taken by the parties or the Court to preserve  and  protect  Latsko’s  rights  under  the  agreement.   FOURTH CLAIM FOR RELIEF (DECLARATORY JUDGMENT PURSUANT TO C.R.C.P. 57 AND C.R.S. §§ 13-51-101, ET SEQ., AGAINST JEROME PROPERTY AND JEROME VENTURES) 230. Plaintiff incorporates by reference the allegations contained in paragraphs 1 through 207 above as though fully set forth herein. 231. Latsko seeks relief pursuant to C.R.C.P. 57 and C.R.S. §§ 13-51-101, et seq. 232. Based on the above allegations regarding the agreement between Latsko and the Jerome Property and/or Jerome Ventures, it is necessary for the Court to declare the rights and obligations of the parties with respect to and under the agreement, including as follows: (a) Determining that the agreement is supported by consideration and is a valid, enforceable contract; (b) Determining that the Plaintiff has a right to specific performance of Jerome Defendants’  warranties,  representations,  and  obligations  under  the  agreement;; Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 22 of 25 (h) Determining that Latsko is entitled to participate in the management and decisionmaking regarding the properties; (i) Determining that Latsko must be made a member of Jerome Property and Jerome Ventures; (j) Determining that Latsko has complied with the agreement; (k) Determining that the Jerome Property and Jerome Ventures are jointly and severely responsible with respect to all declaratory relief as may be granted; and (l) Determining such other reasonable and necessary actions are taken by the parties or  the  Court  to  preserve  and  protect  Latsko’s  rights under the agreement. FIFTH CLAIM FOR RELIEF (PROMISSORY ESTOPPEL AGAINST WILSON, DRW HOLDINGS, DRW MANAGEMENT, AND DRW INVESTMENTS) 233. Plaintiff incorporates by reference the allegations contained in paragraphs 1 through 207 as if fully set forth herein. 234. In   the   alternative   to   Latsko’s   breach   of   contracts   claim,   he   is   entitled   to   relief   under the doctrine of promissory estoppel against the Wilson Defendants. 235. Wilson in his individual capacity, as well as member/manager of DRW Holdings, DRW Management, and/or DRW Investments, promised Latsko a forty-percent share in the ownership entities of the Mortgage Loan and resulting ownership of the Hotel and Cortina Lodge. 236. The Wilson Defendants bound themselves to the promises about the venture. 237. The Wilson Defendants should have reasonably expected their promises to induce action or forbearance on the part of Latsko. 238. Latsko reasonably relied on the Wilson Defendants' promises of a forty-percent share of the Mortgage Loan and resulting ownership of the Hotel and Cortina Lodge by creating and spearheading the deal; providing Defendants the opportunity to purchase the Mortgage Loan; refraining from bringing the opportunity to other investors; structuring and facilitating the purchase; and providing expertise, contacts, funding, and management to the renovation and operation of the Hotel and Cortina Lodge. 239. Latsko has never received any share of the profits, distributions, or benefits of ownership entities of the Mortgage Loan and resulting ownership of the Hotel and Cortina Lodge, or any compensation whatsoever, from Wilson Defendants. Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 23 of 25 240. Latsko  relied  on  the  Wilson  Defendants’  promises  to  the  detriment  of  Latsko. 241. As   a   direct   and   proximate   result   of   Wilson   Defendants’   failure   to   honor   the   contract, Plaintiff has sustained and is entitled to an award of damages in an amount to be proven at  trial,  plus  attorneys’  fees  and  costs.   SIXTH CLAIM FOR RELIEF (PROMISSORY ESTOPPEL AGAINST JEROME PROPERTY AND JEROME VENTURES) 242. Plaintiff incorporates by reference the allegations contained in paragraphs 1 through 207 as if fully set forth herein. 243. In   the   alternative   to   Latsko’s   breach   of   contracts   claim,   he   is   entitled   to   relief   under the doctrine of promissory estoppel against Jerome Defendants. 244. Jerome Defendants have promised Latsko, as a forty-percent shareholder, a share of the profits, distributions, or benefits of ownership of the Hotel and Cortina Lodge. 245. Jerome Defendants have promised Latsko, as a forty-percent shareholder, the right to participate in the management and decision-making regarding the Hotel and Cortina Lodge, and/or participation in the Jerome Defendants as owning entities. 246. Defendants  bound  themselves  to  the  promises  about  Latsko’s  ownership.   247. Defendants should have reasonably expected their promises to induce action or forbearance on the part of Latsko. 248. Latsko reasonably relied on Jerome Defendants' promises by providing Jerome Defendants expertise, contacts, funding, and management to the renovation and operation of the Hotel and Cortina Lodge. 249. Latsko has never received any share of the profits or benefits of ownership of the Hotel and Cortina Lodge, or any compensation whatsoever, from Jerome Defendants. 250. Latsko  relied  on  Jerome  Defendants’  promises  to  the  detriment  of  Latsko. 251. As a direct and proximate result of Jerome Defendants’   failure   to   honor   the   contract, Plaintiff has sustained and is entitled to an award of damages in an amount to be proven at  trial,  plus  attorneys’  fees  and  costs.   SEVENTH CLAIM FOR RELIEF (ACCOUNTING AGAINST JEROME PROPERTY AND JEROME VENTURES) Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 24 of 25 252. Plaintiff incorporates by reference the allegations contained in paragraphs 1 through 207 as if fully set forth herein. 253. Latsko has been wrongfully excluded from the business and ownership of the Hotel and Cortina Lodge. 254. Upon information and belief, Defendants have improperly derived profits and distributions in connection with ownership of the Hotel and Cortina Lodge. 255. Under the agreement, Latsko has the right to an accounting of the profits and distributions of the Hotel and Cortina Lodge. 256. Under the circumstances, it is just and equitable to require Jerome Defendants to provide an accounting to Latsko. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests that this Court enter judgment in favor of Plaintiff, and against Defendants, on each of the Counts herein as follows: a. For damages in an amount to be proven at trial that Plaintiff has suffered   due   to   Defendants’   breaches   of   the   contract,   plus   attorneys’   fees   and   costs; b. For the declaratory relief set forth in the fourth and fifth claims for relief; c. For an accounting of the profits and distributions of the Hotel and Cortina Lodge; and d. necessary. Dated: March 11, 2014 For such other and further relief as this Court deems fair and Pitkin County District Court, Case No. 2014 CV Fred Latsko v. Donald R. Wilson, Jr., et. al. COMPLAINT AND JURY DEMAND Page 25 of 25 Respectfully submitted, THE MATTHEW C. FERGUSON LAW FIRM, P.C. __________________________________ Matthew C. Ferguson, A.R. #25687 Kelly A. Murphy, A.R. #36570 119 South Spring Street, Suite 201 Aspen, Colorado 81611 Telephone: (970) 925-6288 Facsimile: (970) 925-2273 ATTORNEYS FOR PLAINTIFF FRED LATSKO Plaintiff’s  Address: 320 Polmer Park Palm Beach, FL 33480 4840-7389-5449, v. 1