Case 22-50412-KBO Doc 1 Filed 09/07/22 Page 1 of 21

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re Chapter 11

GT Real Estate Holdings, LLC, Case No. 22-10505 (KBO)

Debtor.1

City of Rock Hill,

Plaintiff, Adv. Pro. No. 22-____ (KBO)

v.

GT Real Estate Holdings, LLC, JURY TRIAL DEMANDED

Defendant.

CITY OF ROCK HILL’S COMPLAINT

FOR DECLARATORY JUDGMENT

The City of Rock Hill (the “City” or “Plaintiff”) complaining against defendant GT Real

Estate Holdings, LLC (“GTRE” or “Defendant”) respectfully alleges as follows:

JURISDICTION AND VENUE

1. On June 1, 2022 (the “Petition Date”), Defendant GTRE filed a voluntary petition

under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). The conduct

giving rise to this Complaint occurred prior to the Petition Date. This Court has jurisdiction over

this adversary proceeding under 28 U.S.C. § 1334 and the Amended Standing Order of Reference

from the United States District Court for the District of Delaware, dated February 29, 2012, by

1
The Debtor and the last four digits of its taxpayer identification number are: GT Real Estate Holdings, LLC (9589).
The location of the Debtor’s principal office is 800 South Mint Street, Charlotte, NC 28202.
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virtue of the fact that the City is prohibited under section 362 of the Bankruptcy Code from

pursuing its rights and remedies in connection with GTRE’s prepetition breach of one or more

agreements entered into by and between GTRE and the City prior to the Petition Date.

2. The City does not consent to entry of a final order by the Court in connection with

this adversary proceeding to the extent it is later determined that the Court, absent consent of the

parties, cannot enter final orders or judgments consistent with Article III of the United States

Constitution.

3. Venue for this matter is proper in this District pursuant to 28 U.S.C. §§ 1408 and

1409.

PARTIES

4. Plaintiff is a municipal corporation and political subdivision of the State of South

Carolina.

5. Defendant is a limited liability company formed under the laws of the State of

Delaware with a principal place of business located in Charlotte, North Carolina. Defendant owns

real property and related rights located in Rock Hill, South Carolina and entered into contracts

with the City that are governed by South Carolina law.

FACTUAL BACKGROUND

6. In 2019, GTRE approached the City to discuss the development of approximately

240 acres of property (the “Property”).2

7. GTRE sought to work with the City to develop the Property as a mixed use,

pedestrian-friendly community, which would be anchored by a new headquarters, practice and

training facility for the Carolina Panthers (the “Project”).

2
Capitalized terms not otherwise defined in this Complaint shall have the definitions as set forth in the FCAA, defined
infra.
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8. As a part of this development, GTRE solicited the City’s commitment of public

funds to assist GTRE financially.

9. Although the City was not willing to impose additional taxes on its taxpayers or

backstop this private development with the City’s full faith and credit, the City was willing to issue

public infrastructure bonds to assist with the costs of constructing public infrastructure.

10. Public infrastructure bonds capture the increase in taxes or fees from a property or

impose assessments on the property owners to fund the repayment of the bond or bonds (generally

and collectively, “limited obligation bonds”).

11. At a meeting in July 2019, the City discussed the potential use of different types of

limited obligation bonds with GTRE, including TIF bonds, SSRBs and MID bonds.

12. The issuance of any limited obligation bonds for the Project would be “story bonds”

as GTRE would not be able to use any existing development revenue streams for repayment and

would have to provide adequate documentation and marketing materials containing sufficient

details of the development and the resulting revenue streams to induce potential investors to

purchase the bonds.

13. The City informed GTRE that the City does not generally provide a backstop of

limited obligation bonds and would not provide a backstop for any limited obligation bonds on

this Project.

14. In July 2019, GTRE provided the City with square footage estimates for the

Project’s respective buildings and garages.

15. According to the information provided by GTRE in July 2019, the Project included

an area described as “The Village” consisting of 22 buildings and 6 parking garages; an area

described as the “Training Facility” consisting of an Atrium Building, the Training Facility, a hotel

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and a surface lot; and an area described as “The Corporates” consisting of 10 buildings and

5 garages. The total listed square footage was 3,977,565.

16. Using this information, the City analyzed the potential yield from limited obligation

bonds and, using rough and generic cost estimates, concluded that the proposed improvement types

and square footage would result in the Project having a conservative taxable value in the range of

$798 million.

17. The City analyzed the available information to determine roughly how much

investment in the Project would be necessary for each $50 million in limited obligation bond

proceeds.

18. On August 15, 2019, the City provided GTRE the output of the summary analysis

under two hypothetical assumptions. First, assuming that the City, York County, South Carolina

(“York County”) and York County School District No. 3 (the “School District”) each

commit 100% of their share of the incremental increase in property taxes or fees in lieu of taxes

from the Project, then an increase of $210 million in private investment would yield $50 million

in limited obligation bonds proceeds. Second, assuming the City commits 100% and York County

commits 25% and the School District commits 25% of their respective share of the incremental

increase in property taxes or fees in lieu of taxes from the Project, then an increase of $370 million

in private investment would yield $50 million in limited obligation bonds proceeds.

19. Thus, GTRE was aware as early as August 15, 2019 of the structural potential and

limitations of financing from limited obligation bonds resulting solely from the magnitude of

private development or investment in the Property, without any GTRE backstop, commitment or

other guaranty.

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20. By early September 2019, GTRE informed the City that GTRE would not be

willing to guarantee any private investment above $400 million.

21. Further, GTRE informed the City that GTRE was seeking $193 million in funding

to pay for public infrastructure to be financed from proceeds of limited obligation bonds.

22. The duality of limiting the private investment to no more than $400 million while

seeking up to $193 million in proceeds from limited obligation bonds was structurally problematic

as revealed by the modeling in July and August 2019, but these structural problems could have

been rectified had GTRE been willing to address the relative security and risks to the potential

bond purchasers through additional commitments or measures.

23. The structural issues of GTRE’s proposal were further compounded by York

County’s unwillingness to commit 100% of York County’s and the School District’s respective

share of the incremental increase in property taxes or fees in lieu of taxes from the Project.

24. The City committed 100% of the City’s share of the incremental increase in

property taxes or fees in lieu of taxes from the Project over approximately 30 years.

25. York County committed 75% of the School District’s share of the incremental

increase in property taxes or fees in lieu of taxes from the Project over approximately 30 years,

and the School District’s remaining 25% share was projected to generate approximately $965,000

in new annual revenue for the School District solely from GTRE’s limited commitment of $400

million in investment.

26. Eventually, York County agreed to commit only 65% of York County’s share of

the incremental increase in property taxes or fees in lieu of taxes from the Project over

approximately 30 years, and York County’s remaining 35% share was projected to generate

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approximately $332,800 in new annual revenue for York County solely from GTRE’s limited

commitment of $400 million in investment.

27. On November 25, 2019, the City adopted Ordinance Number M-2019024, which

reclassified the Property as Master Planned Commercial (MP-C) and approved the Rezoning Plan.

28. On or about December 10, 2019, GTRE informed the City that GTRE was seeking

$225 million public infrastructure reimbursements from the bond issuance.

29. However, GTRE did not agree to increase GTRE’s minimum private investment

commitment.

30. The City repeatedly communicated to GTRE that the marketability of the bonds

would be materially improved if GTRE would provide additional, specific development details

regarding the private investment in the Project and identify the master developer for the Project,

but GTRE repeatedly failed to do so.

31. The City repeatedly communicated to GTRE that the marketability of the bonds

would be materially improved if GTRE would provide additional backstop, material security,

accelerated construction or increased private investment commitments.

32. On or about February 28, 2020, GTRE communicated its preference to proceed

with a MID Bond.

33. Under S.C. Code Ann. §5-37-10, a MID Bond is repaid from assessments imposed

within a Municipal Improvement District and can additionally be repaid from a portion of fees in

lieu of taxes paid on behalf of property located in a Multi-County Business Park.

34. Discussions continued through the following months with GTRE’s continued

failure to address the structural issues caused by its conflicting financial structural demands.

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35. However, the City continued to work with GTRE to try and resolve the structural

deficiencies.

36. Effective April 17, 2020, the City and York County entered into that certain

Interlocal Agreement, to which GTRE is an express third-party beneficiary (the “Interlocal

Agreement”).

37. On April 20, 2020, York County adopted (i) Ordinance Number 2020-1220

authorizing York County to enter into the FILOT Agreement, and (ii) Ordinance Number 2020-

1120 authorizing and approving, the creation of a Multi-County Industrial Park (the “MCIP”) in

conjunction with Chester County, South Carolina, the MCIP Agreement, and the Interlocal

Agreement.

38. On April 20, 2020, GTRE and York County entered into that certain Fee in Lieu of

Tax and Incentive Agreement (the “FILOT Agreement”).

39. On April 24, 2020, the City adopted Ordinance Number 2020-29 authorizing and

approving the MCIP and the execution and development of the Interlocal Agreement.

40. On May 4, 2020, Chester County adopted Ordinance Number 2020-12 approving

the creation of the MCIP and the MCIP Agreement.

41. It was expected that the remaining documents (e.g., the LDA, the FCAA, and the

Dedication Agreement, each as defined below) would be finalized and executed shortly after

execution of the Interlocal Agreement and the FILOT; however, the negotiations on these

documents delayed completion thereof.

42. By October 2020, GTRE was willing to commit $500 million in private investment

for a Phase 1 scope which included construction of, among other things, a headquarters facility,

indoor practice facility and stadium (“Park Stadium”), a facility then referred to as the “Atrium

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Performance Center”, and a facility then referred to as the “Atrium Medical Office Building” and

to provide a backstop capped at $7.5 million.

43. However, as forecasted in the original modeling given to GTRE in August of 2019,

the duality of GTRE’s demand for $225 million in bond proceeds while only committing to $500

million in private investment was problematic without GTRE providing additional documentation

for the bond story, additional backstop, material additional security, accelerated construction or

increased private investment commitments, which GTRE steadfastly failed or refused to provide.

44. Pursuant to the financing schedule as of September 30, 2020, the bond issuance was

scheduled to occur on February 25, 2021 and the City continued to negotiate and work with GTRE

toward that objective.

45. On October 23, 2020, bond counsel sent to GTRE (among others in the working

group) a memorandum containing a summary outline to highlight significant provisions of the

Interlocal Agreement and the current draft FCAA and to disclose potential issues and concerns for

consideration by the working group.

46. The bond counsel memorandum discussed numerous GTRE deal points that were

negatively affecting the viability of a successful bond issuance, noting that if GTRE continued its

positioning then the City may not be able to issue sufficient bonds to reach the $225 million

threshold or, potentially, to reach even $135 million.

47. GTRE’s intransigence delayed the schedule such that the action items on the

schedules circulated on December 10, 2020 were approximately 30 to 50 days later than as

previously listed.

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48. On December 10, 2020, bond counsel and the financial advisor sent to GTRE,

among others, the Schedules for Establishment of the MID and the Financial Schedule, showing

the bond closing scheduled for March 23, 2021.

49. Thus, by December 10, 2020, GTRE was aware that GTRE’s negotiating positions

were affecting the City’s ability to issue marketable bonds and had delayed any potential bond

issuance to March 23, 2021.

50. On December 13, 2020 and effective as of December 30, 2020, the City and GTRE

entered into that certain Dedication Agreement (the “Dedication Agreement”).

51. Having received written notice of the unresolved structural issues with GTRE’s

positioning and having received written notice that the bond closing date was scheduled for

March 23, 2021, David Tepper executed the Finance and Construction Administration Agreement

(the “FCAA”) on behalf of GTRE on December 23, 2020.

52. The FCAA was fully executed and effective as of December 30, 2020.

53. On December 30, 2020, and effective as of December 13, 2020, the City and GTRE

entered into that certain Land Development Agreement (the “LDA”).

54. The FCAA contains the following terms material to this Complaint:

A. [O]ther than those obligations of the Developer expressly described herein

that are to be taken prior to the initial issuance of the Bonds, Developer shall
have no obligations (but shall retain all rights) under this Agreement, the
Dedication Agreement or the Land Development Agreement (in its role of
“Developer”) until the City has issued the initial series of Bonds. (FCAA,
§ 1.1(b).)

B. No later than 5 days after City approval of this Agreement, ...the City shall
deposit $20,000,000 into a City account... the proceeds of which shall be
applied solely towards funding the costs of Bond Funded Infrastructure in
accordance with the terms hereof (the “City Infrastructure Funding
Amount”). Notwithstanding any provision in this Agreement to the
contrary, the City shall have no obligation to provide any funding in
connection with the Bond Funded Infrastructure apart from (I) amounts in
the Panthers Fund to the extent permitted in the Project Documents and the
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Bond Documentation, and (II) the City Infrastructure Funding Amount...

Payment of such City Infrastructure Funding Amount to the Developer shall
be in exchange for the Developer’s obligation, by October 30, 2023, to (i)
construct certain Bond Funded Infrastructure in connection with the City’s
combined utility system for which Infrastructure Costs are $20,000,000 as
supported by documentation provided to the City, and (ii) expend the entire
City Infrastructure Funding Amount. (FCAA, § 3.4(a)(2).)

C. The City shall use reasonable best efforts to issue Bonds, some of which
may be taxable in nature, in an amount sufficient to fund the Project Fund
with the Maximum Project Fund Amount by no later than February 26,
2021, it being acknowledged by the Parties that (i) “reasonable best efforts”
by the City, as used anywhere in this Agreement, shall not require the City
to pledge, use or contribute any City funds, revenues or assets to the
repayment of the Bonds beyond the Panthers Fund Proceeds, Reserve Funds
derived from proceeds of the Bonds, together with capitalized interest, if
any, or MID assessments imposed in accordance with the MID Governing
Documents; and (ii) the City’s “reasonable best efforts” to issue Bonds shall
not be construed as an assurance or guarantee by the City that there will be
a buyer for any of the Bonds. (FCAA, § 3.4(b).)

D. If the initial issuance of Bonds results in funds in the Project Fund equal to
the Maximum Project Fund Amount, (i) the Bond Trustee shall... provide
funding directly to the City out of the Project Fund in an amount equal
to 100% of the City Infrastructure Funding Amount.... (FCAA, § 3.4(b)(1).)

E. If the initial issuance of Bonds results in funds in the Project Fund equal to
an amount less than the Maximum Project Fund Amount: (A) The City
shall receive funding in an amount calculated by multiplying (i) the City
Infrastructure Funding Amount by (ii) a fraction (expressed as a
percentage), the numerator of which is the amount of funds in the Project
Fund resulting from the initial issuance of Bonds, and the denominator of
which is the Maximum Project Fund Amount. The Bond Trustee shall
...provide such funding directly to the City out of the Project Fund.... For
the avoidance of doubt, by way of example: if the initial issuance of Bonds
resulted in $112,500,000 being deposited into the Project Fund, the City
would receive funding in the amount of $10,000,000, or half of the City
Infrastructure Funding Amount, calculated as follows: $20,000,000 x
($112,500,000)/($225,000,000) =$10,000,000.... (FCAA, § 3.4(b)(2).)

F. If the initial issuance of Bonds results in funds in the Project Fund in an

amount less than the Maximum Project Fund Amount, the City shall use
reasonable best efforts to issue one or more subsequent series of Bonds
(each, a “Subsequent Debt Issuance”) to reach the Maximum Project Fund
Amount in the Project Fund.... (FCAA, § 3.4(b)(3).)

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G. The City and the Developer acknowledge that issuing the Bonds will require
the City and the Developer to work closely together and consider issues
relating to various items, including without limitation, the timing of
issuance, reimbursements and appropriate disclosure. The City and the
Developer agree to cooperate in the preparation of any feasibility study,
market study or revenue report, and in communicating to Underwriters the
nature and extent of the Developer investment and drafting marketing
materials to reflect such Developer investment.... The Developer agrees to
sign and deliver, in connection with the issuance of any Bonds on a federal
tax-exempt basis, a federal tax regulatory agreement, federal tax certificate,
or other similar documentation in a commercially reasonable form if
requested by the City or its bond counsel. (FCAA, § 4.1.)

H. [A]ny construction materials, equipment and services purchased by the

Developer, as agent of the City... in connection with the construction,
configuration, implementation and/or installation of the Bond Funded
Infrastructure, shall be deemed purchased by the Developer as agent of the
City... on behalf of the City... as the ultimate owner of the Bond Funded
Infrastructure in accordance with the Project Documents.... (FCAA,
§ 5.1(b).)

I. The Developer acknowledges that the primary source of payment of Bond

Requirements and other amounts due with respect to the Bonds is intended
to be Panthers Net Park Fees paid by owners and lessees of real and personal
property in the Park. (FCAA, § 6.1(a).)

J. The City’s issuance of the Bonds will be undertaken in reliance upon the
Developer’s... completion of, and investment of not less than
$500,000,000.00 (the “Phase I Minimum Investment”) in improvements
comprising Phase I (but not less than the completion of the Panthers
Headquarters/Indoor Practice Facility and the Park Stadium) on or before
December 31, 2023, so long as Bonds are issued in an aggregate amount
sufficient to fund the Project Fund with at least $135,000,000 (unless the
Developer agrees in its sole discretion to a lesser amount).... So long as the
City uses reasonable best efforts to fund the Project Fund with the
Maximum Project Fund Amount, Developer shall use commercially
reasonable efforts to complete the Private Improvements. (FCAA, § 8.2.)

K. Each Party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other Party may
reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions
contemplated hereby. (FCAA, § 12.6.)

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L. The Parties agree to cooperate with each other to effectuate the provisions
of this Agreement and to act reasonably and expeditiously in all
performances required under this Agreement. (FCAA, § 12.12(a).)

55. In the FCAA, the City agreed to provide GTRE $20,000,000 (the “City

Infrastructure Funding Amount”) subject to the prescribed condition that the City would be repaid

the City Infrastructure Funding Amount (potentially prorated) from bond proceeds.

56. GTRE’s use of the City Infrastructure Funding Amount was expressly restricted by

the FCAA, which provided that City Funded Infrastructure “shall be applied solely towards

funding the costs of Bond Funded Infrastructure” and that “[p]ayment of such City Infrastructure

Funding Amount to the [GTRE] shall be in exchange for the [GTRE’s] obligation, by October 30,

2023, to (i) construct certain Bond Funded Infrastructure in connection with the City’s combined

utility system for which Infrastructure Costs are $20,000,000 as supported by documentation

provided to the City.”

57. The City remitted the City Infrastructure Funding Amount to GTRE in accordance

with the FCAA.

58. The FCAA required GTRE to “sign and deliver, in connection with the issuance of

any Bonds on a federal tax-exempt basis, a federal tax regulatory agreement, federal tax certificate,

or other similar documentation in a commercially reasonable form if requested by the City or its

bond counsel.”

59. Bond counsel worked extensively to obtain GTRE’s cooperation with this

contractual mandate.

60. For a bond to be issued on a federal tax-exempt basis, the rules and regulations of

the Internal Revenue Code must be followed for so long as the bonds are outstanding.

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61. Bond counsel repeatedly requested that GTRE provide additional documentation to

specify with sufficient detail GTRE’s intended use of the bond proceeds to ensure the bonds would

be tax exempt.

62. On January 19, 2021, GTRE communicated that GTRE could not provide greater

details as to its intended use of bond proceeds and suggested “maybe the simplest thing to do is

make 10-15% of the bonds taxable.”

63. GTRE was advised on more than one occasion that the marketability of the bonds

would be severely hampered if the bonds could not be issued on federal tax-exempt basis.

64. Underwriter’s counsel, among others, continued to work with GTRE to obtain the

necessary documentation for the City to issue bonds as contemplated by the FCAA.

65. As of January 11, 2021, the financing calendar remained on schedule for a closing

date of March 23, 2021.

66. However, in February 2021, GTRE communicated to the City that the bond offering

may need to be delayed.

67. GTRE prevented any bond closing from occurring in March 2021 and thereafter by

refusing to agree to a commercially reasonable tax certificate, by failing to provide documentation

and certifications as prescribed in the FCAA and failing to cooperate as prescribed in the FCAA.

68. During this time, GTRE was fixated on reaching the Maximum Project Fund

Amount ($225 million) in one tranche and without GTRE providing additional documentation for

the bond story, additional backstop, material additional security, accelerated construction or

increased private investment commitments.

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69. By September 2021, GTRE still had not responded substantively to bond counsel’s

continuing requests for the necessary details and commitments for issuance of the bonds on a

federal tax-exempt basis.

70. In the Fall 2021, GTRE advised the City that GTRE was unable to finalize an

agreement with Atrium or with any other hospital operator.

71. In the Fall 2021, GTRE advised the City that GTRE was unable to reach terms with

any hotel operator for inclusion in this Project.

72. In December 2021, bond counsel made progress in its efforts to obtain GTRE’s

agreement on the necessary tax certificate, although GTRE never executed any tax certificate.

73. In January 2022, the City was prepared to market bonds in an amount sufficient to

fund the Project Fund with at least $135,000,000.

74. However, on January 13, 2022, GTRE instructed the City not to proceed with the

bond offering.

75. Further, on January 13, 2022, GTRE advised the City that GTRE was likely to be

unable to proceed and would have to scale the Project down to include the Panthers’ facilities only,

using some other financing methods.

76. In March 2022, GTRE ceased development of and construction work on the Project.

77. On March 18, 2022, GTRE delivered a notice of GTRE’s claim that the City was

in default of the FCAA.

78. On April 29, 2022, the City delivered a formal notice of default to GTRE with

respect to the FCAA.

79. GTRE failed to cure its defaults within the prescribed time allowed in the FCAA.

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80. The City holds a liquidated claim in the amount of not less than $20 million and is

entitled to additional amounts to be proven at trial.

81. The FCAA expressly contemplated and addressed that the Project might not support

an immediate, single bond issuance at the Maximum Project Fund Amount.

82. The FCAA expressly allowed the Maximum Project Fund Amount to be reached

through subsequent series of bonds if the initial bonds were less than the Maximum Project Fund

Amount.

83. Significantly, the FCAA expressly triggered GTRE’s construction obligation upon

the issuance of bonds in an amount sufficient to fund the Project Fund with at least $135,000,000.

84. Restated, among other obligations, the FCAA mandated GTRE complete the

construction as set forth in Article 8.2 if the City, using reasonable best efforts, issued bonds in an

amount sufficient to fund the Project Fund with at least $135,000,000.

85. The City would have been able to issue bonds in an amount sufficient to fund the

Project Fund with at least $135,000,000 in March 2021 had GTRE performed its obligations under

the FCAA.

86. Moreover, the City would have been able to issue bonds in an amount sufficient to

fund the Project Fund with at least $135,000,000 in February 2022 had GTRE performed its

obligations under the FCAA.

87. GTRE breached the FCAA, including but not limited to, Articles 4.1, 8.2, 12.6,

12.12(a), by failing or refusing to cooperate, communicate, perform further acts, execute and

deliver necessary documents and act reasonably and expeditiously, in a timely and complete

manner, for the performance and consummation of the transactions contemplated by the FCAA

thereby delaying, impeding and preventing the City’s performance under the FCAA, including but

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not limited to, the satisfaction of the condition precedent set forth in Articles 1.1(b) and 8.2 of the

FCAA.

88. GTRE failed to timely and effectively cooperate with and agree to any initial bond

issuance in an amount sufficient to fund the Project Fund with at least $135,000,000 but less than

Maximum Project Fund Amount as prescribed in the FCAA.

89. By way of example and without limitation, GTRE failed to timely provide the bond

team the necessary documents and information as to the development of the Project, failed to sign

and deliver the documents necessary for the issuance of tax-exempt bonds and twice prevented the

City from proceeding to an initial bond closing.

90. GTRE further defaulted on its obligations under the FCAA as set forth herein when

it suspended construction of the Panthers Headquarters/Indoor Practice Facility and the Park

Stadium.

91. Based on the foregoing, GTRE has breached the LDA and the Dedication

Agreement.

CLAIMS FOR RELIEF

For a First Cause of Action

(Breach of Contract)

92. The City hereby reiterates and incorporates by reference all of the foregoing

allegations as fully as if set forth verbatim herein.

93. GTRE breached the terms of the FCAA, the LDA and the Dedication Agreement.

94. The City has been damaged by GTRE’s breach of contract.

95. The City is entitled to recover damages from GTRE’s breach of contract, including

attorneys’ fees and prejudgment interest.

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96. Accordingly, pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202,

the City seeks entry of an order and a judgment declaring that GTRE breached the FCAA, the

LDA and the Dedication Agreement and that the City is entitled to damages arising therefrom.

For a Second Cause of Action

(Breach of Contract Accompanied by Fraud)

97. The City hereby reiterates and incorporates by reference all of the foregoing

allegations as fully as if set forth verbatim herein.

98. GTRE breached its contractual obligations to the City.

99. The circumstances surrounding GTRE’s breach as described herein demonstrate

that GTRE had fraudulent intent.

100. GTRE’s conduct in breaching the contract is characterized by dishonesty in fact,

unfair dealing, or the unlawful appropriation of the City’s property.

101. GTRE is liable to the City for breach of contract accompanied by fraud.

102. The City is entitled to recover from GTRE compensatory damages arising from

GTRE’s wrongful conduct and punitive or exemplary damages in an amount to be proved at trial.

103. Accordingly, pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202,

the City seeks entry of an order and a judgment declaring that GTRE is liable to the City for breach

of contract accompanied by fraud and that the City is entitled to damages arising therefrom.

For a Third Cause of Action

(Constructive Trust)

104. The City hereby reiterates and incorporates by reference all of the foregoing

allegations as fully as if set forth verbatim herein.

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105. Pursuant to the FCAA, all work, materials, equipment and services purchased by

GTRE using the City Infrastructure Funding Amount was purchased by GTRE expressly as agent

for the City.

106. Pursuant to the FCAA, GTRE performed the construction, configuration,

implementation or installation of part of the Bond Funded Infrastructure using the City

Infrastructure Funding Amount as agent for and on behalf of the City.

107. Thus, as the City’s agent, GTRE received the City Infrastructure Funding Amount

and expended the City Infrastructure Funding Amount on certain work, improvements, materials,

equipment and other facilities along with the rights-of-way and other real property interests related

thereto (collectively, the “City Funded Infrastructure”), but has not conferred title of the City

Funded Infrastructure to the City as prescribed in the FCAA and the Dedication Agreement.

108. Upon information and belief, GTRE converted the entire City Infrastructure

Funding Amount into the City Funded Infrastructure.

109. The City Infrastructure Funding Amount never belonged to GTRE and the resulting

the City Funded Infrastructure never belonged to GTRE.

110. However, GTRE continues to exert exclusive dominion and control over the City

Funded Infrastructure in this Bankruptcy Case.

111. The retention by GTRE of the ownership, control and benefit from the City Funded

Infrastructure would be inequitable.

112. Accordingly, pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202,

the City seeks entry of an order and a judgment declaring for the benefit of the City a constructive

trust over all City Funded Infrastructure.

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For a Fourth Cause of Action

(Resulting Trust)

113. The City hereby reiterates and incorporates by reference all of the foregoing

allegations as fully as if set forth verbatim herein.

114. The City is entitled to an order of this Court declaring the City is the owner of all

City Funded Infrastructure by virtue of a resulting trust arising from the City’s delivery of the City

Infrastructure Funding Amount, the terms and conditions of the FCAA controlling the use by

GTRE of the City Infrastructure Funding Amount as agent on behalf of the City, the conversion

by GTRE of the City Infrastructure Funding Amount into the City Funded Infrastructure, the

retention by GTRE of the ownership of and beneficial control over the City Funded Infrastructure,

and the circumstances and effect of GTRE’s intentional breaches of the FCAA and other

agreements.

115. Accordingly, pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202,

the City seeks entry of an order and a judgment declaring that the City is the owner of all City

Funded Infrastructure and that such City Funded Infrastructure does not constitute property of

GTRE’s estate under section 541(a) of the Bankruptcy Code.

JURY TRIAL DEMAND

116. The City hereby demands a trial by jury on the legal matters set forth herein.

PRAYER FOR RELIEF

WHEREFORE, the City respectfully requests that the Court enter an order and judgment

pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, granting the following relief:

A. That the City is entitled to actual damages of not less than $20,000,000;

B. That the City recover compensatory damages in an amount proven at trial;

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C. That the City recover punitive or exemplary damages in an appropriate

amount to be proved at trial;

D. That the City recover the costs, including attorneys’ fees necessitated and
incurred as a result of this action;

E. That the City recover interest to the extent permitted by law;

F. That the Court issue a Declaratory Judgment establishing the rights of the
parties as set forth herein, including but not limited to vesting title and
control of the City Funded Infrastructure to the City;

G. That Costs be taxed against GTRE; and

H. That the City recover such other and further relief as to the Court seems just
and proper.

Dated: September 7, 2022 Respectfully submitted,

Wilmington, Delaware
/s/ Maris J. Kandestin
Maris J. Kandestin (No. 5294)
MCDERMOTT WILL & EMERY LLP
The Nemours Building
1007 North Orange Street, 10th Floor
Wilmington, DE 19801
Telephone: (302) 485-3900
Fax: (302) 351-8711
E-mail: mkandestin@[Link]

and

Charles R. Gibbs (admitted pro hac vice)

MCDERMOTT WILL & EMERY LLP
2501 North Harwood Street, Suite 1900
Dallas, Texas 75201
Telephone: (214) 295-8000
Fax: (972) 232-3098
E-mail: crgibbs@[Link]

and

W. Mark White (admitted pro hac vice)

SPENCER & SPENCER, P.A.
226 East Main Street
P.O. Box 790

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Rock Hill, South Carolina 29731

Telephone: (803) 327-7191
Fax: (803) 327-3868
E-mail: markwhite@[Link]

Counsel to City of Rock Hill, South Carolina

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