North Shore, Columbine spar over ‘extortion’ allegation

LOVELAND — Extortion, or not. 

The parties to the North Shore Manor Inc. versus J. Robert Wilson and Columbine Management Services Inc. court case are sparring in Larimer County District Court over whether “extortion” occurred in the dispute between the parties, although no formal charges have been filed and no demand for relief has been filed alleging that crime.

The issue arose when Wilson and his companies filed their answer to the district court lawsuit that North Shore originated. In that answer, attorneys for Columbine included a “preamble” that included as its first sentence that U.S. Bankruptcy Court Judge Joseph Rosania “admonished (North Shore) and its counsel and threatened to dismiss (North Shore)’s bankruptcy for … trying to extort $10,000,000 from Bob (Wilson).” 

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North Shore had filed for bankruptcy but asked for dismissal of the action prior to filing the district court action. Judge Rosania had advised that the dispute between the parties might be better handled in a different venue.

North Shore filed a motion with the district court in January to have that sentence stricken from Columbine’s response, claiming that it was “entirely untrue and demonstrably false and defendants and their counsel knew it was false.” It was an attempt to prejudice the judge and public against North Shore, the motion said.

Columbine’s attorneys responded Feb. 16, saying that its answer “makes a short, plain, accurate, and relevant reference to the bankruptcy court’s findings about NSM’s extortion attempts.”

Columbine’s filing then listed references to filings (made by Columbine) “alerting the bankruptcy court to the extortion scheme.” 

“The bankruptcy court didn’t not strike those filings,” the motion said.

On Feb. 23, North Shore again asked the district court to strike the extortion reference, saying “Rather than simply pointing out where the bankruptcy court stated what defendants allege was said, defendants cite largely their own previous unproved allegations as evidence of the extortion scheme and — when they bother to address the bankruptcy court’s statements at all — they torture those statements to attempt to twist them into something supporting the inflammatory language of the answer. Because the record indisputably establishes that the bankruptcy court did not say what the defendants claim it said, the challenged language must be stricken from the answer.”

“The bankruptcy court never used the word extortion nor did it ever reference $10,000,000 or any comparable sum,” North Shore’s reply continued.

Meanwhile, on Feb. 22, Columbine renewed its demand for summary judgment on a guaranty of a promissory note. 

In the months leading up to the North Shore bankruptcy, Wilson as managing partner for North Shore arranged for a loan from the Bank of Oklahoma. The due date for that note triggered the bankruptcy, which was filed one day prior to the note due date.

What North Shore’s majority partners did not know at the time was that Wilson had formed Wapello Holdings LLC in order to purchase the note from BOK, along with the guaranty that went with it.

Wilson and Wapello have sought to receive payment on the note or enforce the guaranty.

North Shore in its response questioned the existence of the note, saying that the demand made no reference to Oklahoma law nor had Wapello made the original note available for inspection.

Wapello’s Feb. 22 filing said that North Shore “does not dispute signing the guaranty” and the court “needs nothing more to grant summary judgment.”

It said citing Oklahoma law is “immaterial” and that the burden of proof has shifted to North Shore to “set forth specific facts showing that there is a genuine issue for trial.”

The case and counterclaim is North Shore Manor Inc. vs. J. Robert Wilson, Columbine Managemebnt Services Inc. and Wapello Holdings LLC, case number 2023cv30883 in Larimer County District Court.