For years, creditors have nipped at Mason’s heels, trying to collect on sizable loans he and his businesses took out before Atlanta’s latest real estate boom busted. Mason’s lawyer maintains the money is lost.
“There’s no question that he’s had substantial, if not all of his wealth, wiped out,” said former Gov. Roy Barnes, Mason’s attorney.
In a sharp rebuke of Mason in court last month, U.S. District Court Judge William S. Duffey called the developer “problematic in the way that he has managed his life and his responsibilities,” citing “delayed payment of just debts.”
“If he’s done something wrong, he needs to be held accountable,” Duffey said, according to a court transcript.
Duffey said he hadn’t pre-judged the case, but he wants Edgefield to have a shot at untangling the Mason family assets.
“The only judgment I have made so far is that there is something here that needs to be discovered, and I intend to find out what that is,” he said.
Opening the floodgates
Edgefield isn’t the first company to try to collect against Mason’s assets.
In a case in Gwinnett Superior Court, a corporate cousin of Edgefield recently got the go-ahead from the Georgia Court of Appeals to continue pursuing another claim. That case involves about $20 million in debt Mason and a partner, Thomas Brock, accrued related to a planned residential project near the Mall at Stonecrest in Lithonia. The men personally guaranteed repayment of the loan — a common move to secure financing. When the loan defaulted, their assets were on the hook.
That case has been bottled up in court.
If Edgefield succeeds in federal court, it could open the floodgates to other creditors looking to collect.
Edgefield is seeking to collect $1 million on a loan that originated from United Community Bank and a $5 million debt from a loan by the failed Georgian Bank, where Mason was once an investor and major client.
Edgefield bought the two loan judgments in April. Struggling banks and the Federal Deposit Insurance Corp. sell loans and judgments they don’t have the time or money to collect. The buyers then pursue the debts.
In an early hearing in the federal suit, one witness for Rialto Capital Advisors, which owns Edgefield, said it was clear that Mason had moved money when he claimed it was gone.
“It wasn’t until I was able to subpoena other lenders… I could see that those assets had not been lost but instead had been transferred to Mason Capital,” said Mark King, a Rialto Capital managing director, referring to one of the developer’s companies.
Barnes, who is also representing Mason’s family and related interests, said in an interview that many of the contested asset transfers weren’t maneuvers to dodge debts. Instead, they were done over a number of years as part of estate planning for Mason, who is in his mid-70s. Barnes denied the family had done anything improper and sought to dismiss the lawsuit.
“…We think that it’s nothing more than a fishing expedition,” he said.
The Mason name is synonymous with Gwinnett County. As a water authority chairman, county commissioner, then commission chairman from 1976 to 1980, Mason was involved in many key decisions during Gwinnett’s rise. He created countywide fire and recreation services; he also brought the water and sewer services that allowed for Gwinnett’s rapid growth.
“A lot of the foundation for many of the things that set us apart now were laid during that time,” said Charlotte Nash, the current Gwinnett chairman. “He’s a risk-taker.”
Real estate transactions, however, cast a cloud on his tenure as chairman. Mason survived 17 grand jury investigations during his time in office without indictment. The probes delved into his sale of property to the Gwinnett school board, as well as his influence on the county’s decision to approve roads and utilities that passed near land owned by him, his family and friends, raising property values. He dropped out of his 1980 re-election campaign amid the allegations.
Mason had been a residential developer in the Snellville area before he was elected. After he left office, he turned largely to land speculation and flipping, enjoying outsized success throughout much of his career.
He assembled land that later was developed as Sugarloaf Mills mall. He also picked up 4.6 miles of former Norfolk Southern rail beds that were sold a few years later to the city of Atlanta to be part of the Beltline project. That 2008 deal netted at least $45 million in profit, according to the Edgefield lawsuit, funds the creditors said might have been used to pay off debts.
“He had the foresight to buy a lot of land at a time when it was not very valuable and sell it when it was,” said Elliott Brack, editor of the Gwinnett Forum and a county historian. “People would come to him to sell because they knew he’d buy. When people come to you left and right selling land, you end up with a lot of it.”
Emory Morsberger, a developer who said he talks to Mason on a weekly basis, said that when the recession hit, Mason "got hammered, just about like everybody else," but has been straightforward in his dealings. Even with his financial troubles, Mason has been working behind the scenes to expand Gwinnett's school board in an effort to add diversity that better reflects the county, Morsberger said.
Mason also worked long after he left office to help seed Georgia Gwinnett College. He remains engaged as an emeritus member of the board of the Gwinnett Chamber of Commerce, and he's also on the board of the Gwinnett Medical Center Foundation.
“He has done a lot of good things. He continues to do a lot of good things,” Morsberger said.
Power and setbacks
Real estate developers often put their personal fortunes on the line with each project they undertake. They create individual companies to separate assets, and banks typically have developers sign “guaranties” to ensure that if a project goes bad, developers, personally, will make good on the loan.
Wily developers also tend to know how to work the system, stashing assets like homes under the names of spouses or separate businesses. In Mason’s case, Edgefield alleges he transferred stock and cash to accounts held by his wife and daughter, and moved property between entities.
Mason’s wife, Annette, was served court papers at a nearly half-million dollar Snellville home that is in her name.
The Gwinnett lawsuit raises questions about whether Mason has other properties under the names of companies that share an address with his main firm and family foundation.
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.
Savvy developers also find it helpful to have friends among the political elite, and when the recession hit some found allies at the state Legislature. The Georgia Senate in 2012 unanimously approved a bill that would have forgiven the guarantors of failed loans that were sold to certain third-party creditors. Some lobbyists dubbed it the "developer bailout bill," or, alternatively, "the Wayne Mason bill," although Mason was never directly tied to it.
Had it passed, it would have protected Mason from the civil judgments that Edgefield bought and that vex him now. But the bill failed in the House after protests by the banking industry.
Still, Mason’s political pull is notable.
In addition to Mason’s having a former governor as a lawyer, his son Keith was chief of staff to former Gov. Zell Miller, a White House aide to President Bill Clinton and a member of the Georgia leadership team for Hillary Clinton’s 2008 presidential campaign.
Keith Mason is also treasurer of K.W. Mason Co., which is a defendant in the Edgefield suit. Edgefield, which is ultimately owned by home-building giant Lennar Corp., also sued Lone Pine, Mason Capital and The Mason Family Trust.
Mason did not respond to a request for comment, but in a 2008 interview with The Atlanta Journal-Constitution, he said he’d never seen a downturn hit as hard as the Great Recession.
To friends and other developers under siege, he said his advice was: “Stand tall as timber and never bend. Never bend.”
To that end, Mason has fought his creditors ferociously in court. The recent case that went to the state Court of Appeals has been tied up in legal wrangling for years.
The Edgefield suit lists properties Mason allegedly transferred to other entities, including retail centers and office space in Gwinnett and the building that housed the former Gold Club in Buckhead. Among the other assets Edgefield alleges were improperly transferred were the millions in proceeds from the Beltline land sale.
Edgefield sought a temporary restraining order to prevent the moving of assets, with Edgefield’s lawyer expressing fear the assets might “up and walk.” But the judge denied the motion, saying he’d seen no evidence that any assets Mason’s entities still own were being moved. Duffey said he’d hold the defendants accountable if they were.
Jason DeJonker, a Seyfarth Shaw attorney who represents Edgefield Holdings, declined to comment for this story.
Barnes said Mason no longer owns many of the listed properties and assets because they were foreclosed on during the crisis or sold as part of Mason’s regular business dealings.
The judge blistered both sides in last month’s hearing.
He told attorneys for Edgefield that he thought they “overshot” in their claims, and they have since come back with a more disciplined complaint.
As for Mason, if he had done something wrong, he was going “to be held accountable,” Duffey said.
“He has been in the public eye for a long time, and not a lot of it is very good recently,” the judge said.
“So gird your loins, Mr. Barnes…we are going to find out what happened.”