Monday, January 30, 2023

Denver real estate firm’s partners feuding over investor funds

Two partners from a Denver-based real estate firm had a falling out and the case ended in court.

Adam Hazlett filed a lawsuit against Ben Hrud in late October. According to the lawsuit, Hruda founded Flywheel Capital in July 2017 and Hazlett became a 50 percent partner in January 2018.

In the lawsuit, Hazlett accuses Hrouda of misappropriating investor funds and filing fraudulent tax returns, among other things.

Hazlett says he wants Hrouda to buy out his stake in Flywheel and related companies because of Hrouda’s “compromised ethics”. But he says Hrouda did not follow the process outlined in the operating agreement for such a situation.

Hruda deferred comment from his lawyer, who said the charges in the suit were “categorically false.”

“This is a partnership dispute in which one party improperly uses the courts to reach a larger settlement,” said Stephen Woodrow of Woodrow & Peluso, declining to comment further.

Attorney Hazlett declined to comment.

The company develops and acquires

Flywheel Capital not only develops projects, but also buys existing properties.

The company’s development activities include the conversion of a former residential building at 4550 W. Colfax Ave. in Denver in condominiums and a 5.5-acre residential complex off I-25 / Evans Avenue.

In October, Flywheel acquired the Gateway Center office town of four buildings on the outskirts of Aurora and Denver for $ 66.85 million. In March, the company paid $ 21.07 million for 127,297 square feet of office space in Lakewood.

According to the lawsuit, when Hazlett joined Flywheel in January 2018, he became a 50 percent member of various Flywheel-related structures. These entities include Flywheel Capital LLC, the main organization through which the company raised money from investors, and Park Hamilton Management LLC, which provides property management and brokerage services for Flywheel-owned properties.

According to the lawsuit, the operating agreement for each of these companies gave Hrouda the option to buy back Hazlett’s stake through February 2023.

Nation World News Desk
Nation World News Desk
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