Auto Financing Lawsuit
Credit Acceptance Corp. agrees to $52.1 million class action settlement after overcharging consumers for fees and interest on automobile installment contracts.
Developer InvestmentWilmington, DE: (Feb-25-08) Ron Burkle's Yucaipa Cos. brought a lawsuit against New York property developer Raffaello Follieri, alleging that Follieri misused money intended to develop unneeded Catholic Church property. Sources stated that Yucaipa Corporate Initiatives Fund I sued Follieri in April 2007, claiming he used part of Yucaipa's $55.6 million investment in their joint venture to finance a lifestyle that included private jets, a penthouse, and trips to Europe with his movie star girlfriend Anne Hathaway. Follieri Group spokespersons claimed it could use its ties to the Vatican to acquire real estate. The joint venture owns 11 properties and has hundreds more in a development pipeline.
As part of a settlement reached, sources on both sides said that the suit was resolved with a $12 million settlement agreement. Follieri later acknowledged he cannot pay the $12 million, owing to a lack of funds. In a recent development in the case, an order was passed that calls for three properties owned by the Follieri/Yucaipa Investments joint venture to be given to a Yucaipa affiliate. Yucaipa will transfer its interest in the joint venture to Follieri, giving him sole ownership. Additionally, Yucaipa also would get 40% of any profits, up to a maximum of $10 million, generated by the former joint venture under Follieri's ownership. [THE NEWS JOURNAL: DEVELOPER INVESTMENT]
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