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Suit: Lightning's financial health exaggerated

Published Oct. 2, 2005

It has been a year since the Ice Palace opened in downtown Tampa, but the successor to the company that lost the contract to build a hockey arena elsewhere still hasn't given up trying to convince the courts it was cheated in the deal.

This time, Coliseum Holdings Inc. is suing former Tampa Bay Lightning Governor David LeFevre's old law firm, which supposedly was watching out for the best interests of both the team and Coliseum Holdings. The suit against New York law firm Reid & Priest LLP was filed Thursday in federal court in Tampa. It seeks $25-million.

The suit claims that LeFevre and Reid & Priest purposefully misled Coliseum, city of Tampa officials, local banks and others about the Lightning's financial health as they sought to push Coliseum's predecessor, Tampa Coliseum Inc., out of building an arena on Dale Mabry Highway.

Lawrence Hirsh, a partner with Reid & Priest, said he had not seen the suit by late Thursday and could not comment on its claims. "I guess they think they're going to sue us now for things that he (LeFevre) did," Hirsh said.

LeFevre was with Reid & Priest for more than a decade before leaving the firm in 1993. He could not be reached for comment.

Coliseum's allegations are nothing new. In March, the company's owner, Marc Ganis, sued the Lightning, its primary owner, Kokusai Green Co. of Japan, and LeFevre on similar claims. Those suits are still pending.

What is fresh in the latest suit, however, are revelations about just how financially strapped the Lightning was _ and continues to be.

Documents filed along with the suit show:

Early limited partners in the team, including baseball magnate George M. Steinbrenner and a Japanese development company, demanded their initial investments back at least partly because they thought the venture was badly managed. Both Steinbrenner and Tokyo Tower Development Co. Ltd. had to send several terse letters _ Tokyo Tower eventually sued _ to get their money back.

One limited partner, Equity Resource Group of Indian River County Inc., thought the team was so mismanaged that its president wrote a letter of complaint to the commissioner of the National Hockey League. In his letter, Andrew W. Williams wrote he was "concerned about the welfare of the (NHL) and the Tampa Bay community" because of "the unseemly and improper conduct," by Lightning representatives. Williams also claimed that while Lightning owners were levying a $885,000 special assessment on limited partners because they were hurting for cash, they were paying LeFevre $2-million for arranging an arena deal.

The team on several occasions could not pay its debts. One internal memo indicates that the team was in such dire straits financially in 1993 that both Kokusai Green and the team were almost put out of business.

To get working capital and survive, Lightning representatives may have misled lenders, city officials and the NHL into thinking the Lightning was financially stronger than it was, the suit claims. They also might have misrepresented the ownership of the team, claiming Steinbrenner and others were involved to lend credibility, according to the suit.

"What you have here is a city government that was misled, banks that were misled . . . how much more are we going to uncover as we go along?" said Coliseum attorney Jonathan Alpert.