Trial has begun in a suit claiming prominent Utah developer and Republican Party insider John Price cheated a former associate out of more than $1 million in a New Mexico shopping mall project.
Armand L. Smith and his ex-wife, Virginia Smith, are plaintiffs in the suit first filed more than six years ago.
The suit is against Fairfax Realty Inc., which was founded by Price, 67, who remains its president and director.
The Smiths claim breach of fiduciary duty and breach of contract, including allegations that Price or other officials in the former Price Development Corp. put their own interests before those of other investors.
At the center of the case is the claim that the Smiths' 15 percent interest in the North Plains Mall in Clovis, N.M., disappeared into a real estate investment trust created by the company in 1994 to insulate John Price from personal liability for $94 million of debt — mostly real estate loans.
Attorney Robert Campbell argued Monday that the Smiths are owed $1.3 million for their stake in the mall, plus $228,000 in cash they put in and interest on the money.
The last offer Fairfax made for their property, according to Campbell, was stock in JP Realty valued at $6,160.
Defense attorney Reed Martineau said mall owners were desperate for financing to keep up their short-term loan payments but could find no interested banks or buyers.
"The stark realities of the situation had to be dealt with," he said. Creation of a real estate investment trust, or REIT, "presented the only alternative to foreclosure or bankruptcy. . . . The REIT was the only way to save this mall and avoid a total loss to the parties."