Suit: Wayne Mason owed $300 million in loans, personal guaranties

Wayne Mason   BOB ANDRES  / BANDRES@AJC.COM

Wayne Mason BOB ANDRES / BANDRES@AJC.COM

Wayne Mason is being accused of falsely telling lenders during the economic boom that his net worth was nearly $170 million, leading banks to lend hundreds of millions of dollars to the real estate tycoon and former Gwinnett County Commission chairman, according to new allegations in a debt case originally filed in July.

Mason, who helped propel Gwinnett into a suburban powerhouse, is locked in a battle with creditors that also involves his companies and relatives.

Mason’s attorney claims his client is broke and hasn’t done anything wrong. A creditor called Edgefield Holdings claims Mason fraudulently transferred more than $100 million in cash and assets to relatives and companies connected to him and his family, squirreling away his riches to avoid paying on a mountain of debts.

Edgefield alleges Mason owes the company about $6 million over a pair of judgments on defaulted loans. They’ve targeted relatives of the real estate investor and his companies in the suit.

But what wasn’t known is just how deep Mason’s overall debt is or was.

On Sept. 18, Edgefield filed a second amended complaint in U.S. District Court in Atlanta that provides new details into the financial state of Gwinnett’s white-haired master of the deal as well as the complicated nature of his business dealings.

Among the allegations included in the new filing:

  • Mason falsely reported to lenders in 2007 he was worth $169.8 million ($210.9 million in assets, $41.1 million in liabilities), but he actually had $248.7 million liabilities from his real estate assets. Banks allegedly relied on his purported net worth to lend him hundreds of millions. Mason said in 2010 he had nearly $300 million in loans and personal guaranties, the suit says.
  • In 2009, Mason stopped paying many creditors, and by March 2010, told lenders his net worth was negative $223.7 million.
  • Mason used a web of related companies and bank accounts to transfer assets from his primary businesses to other companies or to family members.

The transfers were made, Edgefield alleges, to keep creditors at bay.

Mason’s lawyer, former Gov. Roy Barnes, has denied in court documents and an earlier interview that neither Mason nor his relatives did anything wrong. Mason, Barnes has said, had his net worth wiped out by a brutal recession.

Asset transfers, Barnes has said, were simple estate planning exercises started over the years for Mason, who is in his mid-70s.

In the latest filing, the plaintiff adds new companies and relatives to the defendant list. You can read more from the latest filing here.

The second amended complaint outlines steps Mason allegedly took to both conceal assets and also assurances he made to creditors that he could repay some of his debts.

The complaint further alleges Mason made millions in investments through his various companies at times when he told his lenders he was tapped out.

The suit also contends Mason “bragged” to business associates that he transferred ownership of assets –including land along what is now the Atlanta Beltline – in order protect his wealth.

One major point of contention in the lawsuit is a mansion along Moore Road in Suwanee. Mason allegedly invested millions in building Rose Hill as he was transferring assets to his companies and relatives. (See the video tour of the mansion below.)

The AJC previously outlined a series of real estate transactions involving the home and Mason-related entities. From a story that ran online Aug. 21, 2015:

For example, creditors in the Gwinnett lawsuit are attempting to prove improper transfers of two homes they allege Mason controls. One is a Suwanee mansion with a hand-cut cobblestone entry and five kitchens, according to a real estate listing.

Gwinnett property records show Mason’s Lone Pine Inc. acquired the property in 2004. In 2005, Mason requested building permits for additions to the home. In 2008, Lone Pine transferred ownership to Mason Capital for $1. A year later, Mason Capital sold the property for $9 million to Moore Road LLC, which shares an address with other Mason entities.

Mason signed loan and deed documents related to the property for Mason Capital. His son, attorney Keith Mason, signed on behalf of Moore Road LLC as trustee for the 2009 Mason Trust.

The house is currently for sale, listed for nearly $11 million. The listing agent declined to identify the seller but said the owner invested $40 million in it. The seller never lived in the house, though, because the seller’s wife wanted to stay in the family’s current home to remain closer to relatives, the agent said.

The creditor alleges Mason made a similar transfer with a Sea Island condo to Moore Road LLC in 2009. It took place the same day of the Suwanee home transfer, property records show.

Barnes said in an email Monday his firm had just received the amended complaint and that he did not know whom among the new defendants he would represent. Attempts to reach an attorney for Edgefield were not immediately successful.