A Tokyo mergers and acquisition firm's claims that it was due a fee from the 2002 sale of the former Arco Plaza have been denied by an appellate panel in the 2nd District.
Interquest Corp. argued that its president and the executive vice president of Shuwa Investments Corp. discussed Shuwa's interest in selling a five-building portfolio, including Arco Plaza, seven times. The two agreed that Shuwa would sell the buildings for the "highest cash offer" or to the "highest cash bidder," according to the recent appellate opinion.
Between March 2001 and February 2002, Interquest presented Shuwa with four offers, ranging from $250 million to $395 million, the opinion states.
In its suit, filed in July 2003, Interquest claimed that it did not have a California real estate license but served as a "finder" and conduit between California brokers and Japanese corporations that "are uncomfortable dealing with businesses with whom they lack an established relationship," the opinion states.
Efforts to sell the 2.6 million-square-foot complex were complicated when Kings Capital LLC acquired $900 million in debt on a number of Shuwa properties in mid-2002. The Business Journal reported at the time that Kings used the prospect of foreclosure to acquire an option to purchase Arco Plaza for $255 million.
"After the buildings were sold, the plaintiff showed up saying, 'I had an oral agreement' that sounded like a brokerage agreement," said Devan Beck, a partner at Alschuler Grossman Stein & Kahan LLP representing Shuwa and Kenichi Isohata, Shuwa's executive vice president, who also was named in the suit. "In California, you have to have a broker's license to sue on a broker's contract."
Under an exception to that law, "finders" of properties may sue for unpaid compensation.
Last month, a three-judge appeals panel affirmed an L.A. Superior Court judge's dismissal of the claim.
"The distinction between the finder and the broker frequently turns upon whether the intermediary has been invested with authority or duties beyond merely bringing the parties together, usually the authority to participate in negotiations," the opinion says.
Richard Gordon, an attorney for Interquest, did not return calls.
Southwestern University School of Law named its first new dean in 27 years after Dean Leigh Taylor decided to retire. Bryant Garth, former director of the American Bar Foundation and former dean of the Indiana University School of Law, will become the school's new dean and chief executive in July. He will be law school's 10th dean.
Gail Standish, a former federal prosecutor who was most recently of counsel at Gibson Dunn & Crutcher LLP, has joined Winston & Strawn LLP as a partner in its Los Angeles office Robert Freilich, a partner at Freilich Leitner & Carlisle and national editor of the American Bar Association's "Urban Lawyer," has joined Paul Hastings Janofsky & Walker LLP of counsel in its real estate practice.
Staff reporter Amanda Bronstad can be reached at (323) 549-5225, ext. 225, or at email@example.com .
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