Developers accused of “double escrow” scheme by business partners

You can enjoy some of California’s gorgeous coastline during the three-hour drive north from Pasadena to San Luis Obispo. The city sits nestled among rolling hills, wineries and resorts, but not everything there is brimming with Old World charm, as a recent exchange of lawsuits among business partners there makes clear.

The city’s daily paper reports that San Luis Obispo developers John Belsher and Ryan Wright are accused of fraud and misrepresentation in an illegal “double escrow” scheme that involves downtown property. The Tribune states that “the lawsuits are just the latest in a series of mounting legal troubles for Belsher and Wright” involving their business, PB Companies, LLC. While the business is now shuttered, it was involved in high-profile commercial and real estate development projects in San Luis Obispo not long ago.

The details of the lawsuits

The suits were filed by a Bakersfield developer and a former dentist, who has partnered with Belsher in various business endeavors for decades. Both men have also sued Belsher in the past over business disputes, though those matters were settled out of court last year.

The paper conceded that this year’s “lawsuits only represent one side of the story.” In his complaint, the Bakersfield developer alleges that Belsher and Wright fleeced his family of approximately $700,000 with the double escrow scheme.

He claims the pair pitched a $1 million investment proposal to his family to purchase a $4 million downtown office building. Belsher allegedly claimed his now-defunct PB Companies was “in escrow” to buy the building, but the Bakersfield developer says Belsher left out an important detail: PB already had a deal to purchase the property for $3.3 million. He alleges that Belsher and Wright used his family’s money to buy the property and then pocket the $700,000 difference.

After details about the dispute were published, Belsher contended that the lawsuits are just unsavory “business tactics” and that he would soon file his own legal claims.

The need for experienced legal counsel in business disputes

It can be difficult for those personally involved in these types of disputes to unravel their differences without the assistance of legal counsel. A lawyer can assist in providing proactive guidance from the start, as well as protecting a business, reputation and livelihood when the stakes are high.