Church Property Venture Goes Bad
A joint venture between a Los Angeles billionaire and an Italian businessman to buy and redevelop Catholic church properties has turned sour.
Ronald Burkle agreed to pay $105 million to fund the project with Italian businessman Raffaello Follieri in early 2005. But a lawsuit filed in April in Delaware state court by Burkle’s investment fund reveals how their relationship quickly deteriorated, according to the Wall Street Journal (sub. req.).
The suit claims Follieri and the business he runs have used at least $1.3 million of joint venture capital to pay for “personal extravagances,” including a New York penthouse, a private jet and five-star hotel rooms.
The suit also claims money was improperly loaned to a nonprofit charity called the Follieri Foundation, the suit says.
President Clinton isn’t mentioned in the lawsuit, but the newspaper reports he is a senior adviser to Burkle’s investment fund. A spokesman said he was not involved in creating or operating the joint venture.
Follieri denied wrongdoing and said foundation loans have been repaid.
