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Developer sues Lake Lawn Resort owners for $13 million

DELAVAN — An Illinois developer is suing the owners of Lake Lawn Resort for $13.15 million, saying they broke a contractual agreement two years ago.

Orren Pickell Development of Lincolnshire, Ill., planned to purchase the 260-acre resort property, hire someone to manage it and build luxury homes on the lake, said Mike Moirano, the attorney representing the developer.

According to the lawsuit, filed Feb. 9 in U.S. District Court in Milwaukee:

The parties entered into a letter of intent in February 2007. The letter was largely non-binding. But some sections were binding, including one that stated Pickell had the right to match or beat any offer. The section also stated that if the parties signed a contract, the property would no longer be for sale, according to the suit.

A March 2007 amendment to the letter prohibited Delavan Resort Holdings from negotiating a transaction with anyone other than Pickell. The amendment also was considered binding, according to the lawsuit.

Pickell learned in April 2007 that "some unidentified investor in the property" was buying the resort and the proposed contract between Delavan Resort Holdings and Pickell had been rejected.

Pickell alleges that Patrick Nelson, Richard Schneider and others who owned interest in Lake Lawn Resort "combined, conspired and agreed to interfere with and frustrate" the developer's efforts to purchase and develop the property because they wanted to do it themselves.

Nelson is president and chairman of Delavan Resort Holdings, which purchased Lake Lawn Resort in September 2004. Schneider is a member of the company's board of directors. Both men have ownership interests in the resort.

Pickell is seeking $150,000 for out-of-pocket expenses and at least $13 million for the loss of profits.

Moirano said the incident came as a surprise to the developer.

"He (Pickell) was led to believe it was just a matter of signing the contract, and then he got word these other guys came along and snatched the deal," he said.

Tony Baish, the attorney representing the Lake Lawn owners, said it probably isn't wise for him to comment on pending litigation.

"Suffice it to say that we deny any liability on behalf of any of the defendants," he said.

Delavan Resort Holdings, Nelson and Schneider next must file a formal answer to the suit, indicating whether they admit or deny the allegations, by April 14, he said.