Litigation surrounding the parent company of Bay Plaza Cos. ended without warning Friday.
Representatives for the J. C. Nichols Co., which controls the Bay Plaza Cos., the designated redeveloper of St. Petersburg's downtown, sent word Friday evening that all parties in a series of federal lawsuits in Kansas City, Mo., have reached a tentative settlement agreement.
The agreement still requires final court approval.
Among the biggest provisions of the settlement, former Nichols president and board chairman Lynn McCarthy has returned 120,000 shares of the Nichols stock he acquired from an employee stock ownership trust.
McCarthy also will return to Nichols stock and land he acquired in transactions that involved the company.
The company, in turn, will reimburse McCarthy $3.6-million for payments he had made to an employee stock trust.
Finally, McCarthy severed all relations with Nichols and agreed to never again serve as a company board member, officer or employee.
Neither Bay Plaza nor Nichols company officials could be reached for comment Friday evening, but St. Petersburg Mayor David Fischer said the settlement could only help Bay Plaza get on with other tasks.
"This is going to help them get along this route with us," Fischer said. "This is the one thing you really want to get cleared up because it's going to allow them to focus" on St. Petersburg.
"This agreement adds significant value" to Nichols, current company president Jack Frost said in a statement from Kansas City. "Not only does it end a costly maze of litigation, but it also brings valuable stock and assets under the firm's control. The company can now move forward to install its new board of directors, continue its strategic planning and get back to the business of being the premier real estate company in the area."
The first legal challenges to Nichols were raised last fall, when McCarthy still headed the company. Allen & Co., a powerful New York investment firm and one-time Nichols partner in a couple of Kansas City real estate deals, alleged that McCarthy had failed to properly present to his board an Allen investment proposal in Nichols.
Earlier this year, the legal wrangling had widened and deepened. Former employees also filed suit. Then, in late May, a handful of Nichols board members successfully ousted McCarthy and several of his top managers from the company.
"We look forward to working with the company to enhance shareholder value and restoring J. C. Nichols to its pre-eminent position as a leading developer," said Jim Quinn, an Allen representative.