San Francisco luxury developer Greg Malin of Troon Pacific allegedly squirreled away his assets in order to avoid paying a $50 million settlement to defrauded investors.
That’s the allegation in a new lawsuit by the investors, UNI SF VII LLC, which says that Troon, knowing he faced a legal battle, in August 2020 transferred his $15 million home into an irrevocable trust in the names of his sons, the San Francisco Chronicle reported.
In addition to transferring his family residence at 1970 Jackson Street, Troon also moved a 2009 Range Rover and a 2014 Tesla into the trust, according to the complaint.
The investors also allege the developer turned over to the trust a large art collection with works by Henri Matisse, Salvadore Dali, David Parks, Chuck Close, Jim Campbell and others.
Malin attorney Adrian Sawyer did not respond to requests for comment from the Chronicle on the lawsuit challenging the irrevocable trust.
Such irrevocable trusts can only be altered by a court order and with approval of their beneficiaries, making it hard for creditors to access the assets.
In May, an arbitrator ruled in favor of investors in four Malin projects, ordering the owner and his firm to pay more than $50 million in damages and fees based on allegations he squandered tens of millions through self-dealing, fraud and embezzlement. A judge sided with the arbitrator.
The investors allege that Troon knew investors in his companies and a prior fund would likely sue him for his misconduct. Otherwise there was “no reason” for him to transfer title of his luxury home to the trust, according to their complaint.
Even after the mansion, cars and artwork were transferred to the irrevocable trust, Malin continued to represent to banks and lenders that he had a net worth between $40 million and $50 million, and that he owned the home on Jackson Street, according to the lawsuit.
“Yet, now that this court has issued the $50 million judgment … Greg has claimed, under oath, that he is effectively destitute … that his assets are limited to ‘certain personal items of little or no value,’” the lawsuit states. “That is, to put it mildly, absurd.”
Malin has said in legal filings for the case: “I do not … serve as trustee (or co-trustee) of the trusts which are the record legal owners of the real estate known as 1970 Jackson Street in San Francisco.”
He said 75 percent of the home, which he said was worth between $12 million and $14 million, is owned by the DM Jr. Trust and 25 percent by the DM Family Trust. The beneficiaries of both trusts are Malin’s adult twin sons, Sebastian Malin and Benjamin Malin.
The sons “were not named as parties or respondents in the arbitration” and were “not the subject of the arbitration award,” Malin stated.
The lawsuit comes five months after arbitrator David Garcia, a retired San Francisco Superior Court judge, ordered Troon Pacific to pay the investors who backed four luxury projects at 2646 Union Street, 2582 Filbert Street, 2950 Pacific Street and 63 Carmel Street, but later sued claiming that Malin and his firm squandered $35 million through self-dealing, fraud and embezzlement.
Malin and Troon have denied wrongdoing.
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Only two of the four projects were ever built, and investors never got a nickel. But Troon Pacific was able to pocket $14 million in fees, including development and general-contracting fees, according to the arbitration award.
Malin also faces a lawsuit from Open AI founder Sam Altman, who alleges the builder “misled” him into buying “a $27 million lemon” at 950 Lombard Street, riddled with defects.
— Dana Bartholomew