The majority owner of Sky Lodge – who has been embroiled in a lawsuit with his fellow condominium owners for years – will be before a judge next month to explain where more than $4-million in fees and assessments have gone. Court documents show that Kenneth Abdalla, Malibu Companies and other Abdalla related entities owe $4.2 million to the homeowners of the Sky Lodge hotel and condos.
In 2017, Ken Abdalla, Malibu Companies, and 14 additional related entities, were sued in 3rd District Court for damages for what plaintiffs say is an outrageous theft of millions of dollars by Abdalla from fellow unit owners in the Sky Lodge and Main and Sky Condominium Hotel Project. The development is located at the bottom of Park City's historic Main Street at Heber Ave.
Some 40 plaintiffs, all partial property owners who have fractional ownership interests in the residential units, assert there has been ongoing theft by Abdalla. The lawsuit claims gross mismanagement of the project, which has resulted in a drop in the property's value and a deterioration of services and on-going maintenance. It also states Abdalla and his companies have disregarded their financial responsibility for managing the Sky Lodge project.
A forensic analysis was submitted by Rocky Mountain Advisors to Third District Court on Friday, November 20th. The forensic analysis found evidence showing a total of at least $4.2 million in claims from 2016 to 2019 from Abdalla and Abdalla entities, owed to the Sky Lodge homeowners.
The filing states issues and problems were found during the forensic audit. The report provides detailed exhibits of expenses showing millions in expenses and claims going back to 2016. The details of the claims are provided in the exhibits.
The forensic report also shows that the Abdalla Entities were paid $2.7 million in commercial expenses by the homeowner association between January 2016 and August 2020. The expenses include food and beverage, payroll, payroll taxes and fees, utilities, and flooring. According to bank records, the association hasn’t received any financial benefits or revenue sharing from the hotel or nightly rental operations.
The audit also claims that excessive resort fees were charged by Abdalla entities from January 2016 to July 2018 in the amount of $117,000.
The filing shows that the allocation expenses also changed after 2015, when the Abdalla entities took over management of the commercial operation.
An electronic hearing is scheduled before Judge Kent Holmberg on December 14th at 9:30 a.m.
