A check for 3 million dollars was supposed to help small business operators in Atlantic City. Why did those monies end up in Tennessee? Why didn’t those millions assist AC start-ups as originally intended?
For the answer, you could ask former Atlantic City Mayor, Lorenzo Langford or Councilman William ‘Speedy’ Marsh who both signed off on that deal. They would likely plead the fifth. Good luck finding answers in the local newspaper. And you can forget about radio pundits shining light on this. (they’re too chummy with Langford)
After years of litigation, US District Judge Robert Kugler finally issued his opinion on the matter of Atlantic City vs Zemurray Street Capital, Wesley Drummon, TN BIDCO, Gary Lax; Michael Lax. (SEE JUDGE OPINION BELOW)
On December 29, Judge Kugler issued this opinion: “This is a cautionary tale in why due diligence is so important and why parties to million-dollar contracts should go through the trouble of defining the terms governing their agreements. At three pages, with virtually no terms defined, with basically no plan for the implementation of the agreement save the use of the word “implement” and some lines indicating TN BIDCO would be used, the parties’ choice to rely on this document to govern the use of millions of taxpayer dollars is, at best, questionable.”
AC Councilman Jesse Kurtz: “It is shocking that 3 million dollars earmarked for the improvement of our city was given to a company with zero track record in a “deal [that] was inked on a contract less sophisticated than a pizza parlor job application”
City of Atlantic City claimed breach of contract & good faith, and variety of fraud.
The City also wanted legal ability to claw back it’s $3 million. As you may recall, those monies were withdrawn from the poorly handled, $5 mil MGM/BORGATA/AC Endowment, provided by MGM in 2006. Atlantic City’s Mayor Lorenzo Langford and Council President ‘Speedy’ Marsh signed off on that $3 million withdrawal.
Acceptable uses of that MGM / AC $5 mil endowment fund include “housing construction and rehabilitation” and “low-interest loans for small-business development.” Atlantic City may have planned to give the Zemurray company up to $40 million, in order to make loans.
Langford & Marsh have a colorful past in Atlantic City: Read More: $850,000 lawsuit settlement with the city by Mayor Lorenzo Langford and City Council President William Marsh. Atlantic City ignored the state Attorney General’s Office, and paid $850,000 to Marsh and Langford to settle a 1999 federal lawsuit. Both claimed discrimination and political retaliation by city officials. They were not happy about losing their jobs at the Atlantic City Board of Education.
Video: Former AC Mayor, Lorenzo Langford talks about black-owned business in Atlantic City.
Judge: City did not prove the complicated scheme it alleges occurred. AC claims there was a scheme to induce the City to enter a contract so that the defendants could ultimately purchase TN BIDCO and make off with the $3 million. That could be true, but Judge Kluge thinks human error is at least as compelling an explanation as fraudulent intent.
AC Councilmen Gilliam, Tibbitt, Shabazz and Small were contacted for their opinion on the matter. ACprimetime will post their comments if provided.
CLICK HERE to READ Judge Kluge Opinion
Atlantic City sues NY businessman to get $3 million investment back in failed loan program
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