In the midst of having to deal with her husband’s suicide, the widow of Winter Park developer Steve Walsh is now being sued by his investment partners.
According to reports, senior members of Broad Street Partners said Thursday that they and other employees of the Winter Park development company were “shocked and saddened” by accusations in a new lawsuit that managing partner Steve Walsh stole at least $21.4 million from investors.
Schrimsher Investments Corp. alleges that prior to his suicide, Walsh misappropriated more than $21 million in funds intended for investment into projects being developed in Florida and South Carolina by Walsh’s company, Broad Street Partners.
Following Walsh’s death, Schrimsher Investments hired Paul Hawkins to investigate the financial accounts of Broad Street Partners and three subsidiary companies in which Schrimsher Investments was a partner. Hawkins allegedly discovered Walsh had made numerous unauthorized loans from the Broad Street Partners-related entities to Broad Street Partners.
The largest alleged transaction was a $15 million loan from BSP/Atlantic to Broad Street Partners. The suit says only $2.4 million was returned to the account.
Schrimsher alleges in its lawsuit that Walsh made the transfers to fund his family’s lifestyle, which including expensive homes in Charleston, S.C., Highlands, N.C., and Winter Park. The company also claims Walsh made the transfers so Broad Street Partners could meet is financial obligations.
The lawsuit also claims Walsh’s widow, Paula H. Walsh, improperly received $1 million over a 10-year period from investor accounts.
Schrimsher Investments is now apparently asking the court to impose an equitable lien and constructive trust on the three homes Walsh and his wife owned – and on five life insurance policies Walsh bought, seeking the return of $21.4 million.
Whether more money might be missing is still an open question, and the fate of hundreds of millions of dollars worth of apartments and mixed-use projects undertaken by the company hangs in the balance.
Matt Bronfman, managing director of Jamestown Properties, an Atlanta-based real-estate investment company that partnered with Walsh and Broad Street Partners on several projects, said Thursday he expects to move ahead with the Skye complex near International Drive.
Tradition Towers, a high-rise complex that had been planned for downtown Orlando, is one of several Broad Street projects that will likely not be built because of Walsh’s death and the ensuing legal issues.
“I don’t think that’s moving forward,” Madsen said.
Funny, I don’t think it ever was…