Developer slapped with $171M fine for breach of fiduciary duty

"They may be partying now, but it won't be for long."

These were the words of Conley Wolfswinkel as quoted in an Arizona Republic article Wednesday.

Wolfswinkel is the father and consultant to Ashton and Brandon Wolfswinkel, who own Vanderbilt Farms LLC. Vanderbilt Farms purchased land in January at a prime commercial development area off Interstate 40 commonly referred to as Kingman Crossing.

The real-estate tycoon's quote does not refer to city of Kingman voters shooting down two ballot measures Tuesday that likely will put a halt to Vanderbilt's plans to work with the city in developing a commercial district and interchange in Kingman.

He was talking about a group of investors who were happy with a verdict in the Maricopa County Superior Court that left Wolfswinkel and another one of his sons' firms the object of what is believed to be one of the largest-ever Superior Court judgments.

According to the Republic, a jury found Wolfswinkel and WVSV Holdings "guilty of aiding and abetting a breach of fiduciary duty" stemming from a 2003 land deal challenged by the original owners. The potentially record-breaking judgment comes after a months-long civil trial in the form of a $171 million fine.

Wolfswinkel, who has been a major developer in the Phoenix area since the 1980s, was involved in the infamous savings and loan scandal of the early 1990s that landed him a nearly $2 billion judgment, fraud charges in 1993 and an eventual five-year probation sentence.

In December of 1990, Wolfswinkel filed for corporate bankruptcy. Two months later, he filed for personal bankruptcy.

While he is barred from owning any companies personally, Wolfswinkel serves as a consultant to his sons, and according to an e-mail the city of Kingman released after a local resident filed a lawsuit for the records, Kingman's former economic development director had scheduled at least one meeting with the consultant to discuss plans for what has been designed as a semi-joint venture in funding an interchange at I-40 here in Kingman.

Vanderbilt Farms purchased approximately 200 acres in Kingman on the north side of I-40 in January for about $12 million. The company has since sold about 35 acres to MedCath Inc., a Charlotte, N.C.-based company that plans to build a $74 million medical center.

Wolfswinkel said, "They may be partying now, but it won't be for long," because his attorneys will appeal the jury's $171 million judgment, expecting an appellate court to disallow the judgment because of the cases that affirmed the land sale, according to the Republic.