Shocker: Investors sue over deal struck with Tony Rezko for piece of The 78

The federal suit seeks the right to future profits from a partner in the megaproject, General Mediterranean Holdings

Chicago /
Jul.July 30, 2020 10:15 AM
GMH CEO Sir Nadhmi Auchi and Tony Rezko with a rendering of the 78 (Getty, GMHSA)

GMH CEO Sir Nadhmi Auchi and Tony Rezko with a rendering of the 78 (Getty, GMHSA)

A group of investors linked to disgraced political fixer Tony Rezko have sued a partner in The 78 megadevelopment in the South Loop, claiming they are getting iced out of a portion of the potential profits for which they are owed.

The 15 investors have filed their complaint against General Mediterranean Holdings, which owns a piece of Related Midwest’s $7 billion project, according to Crain’s. The suit was filed in Cook County Court earlier this year, but moved to federal court last month.

The investors include those from Illinois, Indiana, Argentina and Canada, Crain’s reported. Related is not a party to the suit.
Related’s 62-acre development will include 1.5 million square feet of office space, thousands of residential units and 100,000 square feet of retail, hospitality and restaurant space.

The investors claim a 2007 deal they struck with Rezko, who had been a partner with GMH, stipulated it would receive future profits, according to Crain’s. Rezko, who was a fundraiser for former governor and ex-con Rod Blagojevich, was convicted on corruption charges and spent time in federal prison. He sold his interest in The 78 project to a GMH subsidiary in 2007.

GMH has previously said it dissolved the company Rezko had formed, which comprised his holdings in The 78. The investors were minority partners in that company, according to Crain’s.

GMH is also fighting another lawsuit from a different group of investors, which is now being heard by an arbitrator, according to the report. [Crain’s] — Alexi Friedman 


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