Edward J. Tutunjian, the embattled “taxi king” of Boston who was recently sentenced to 18 monthsin a halfway house for tax evasion and other crimes, desperately maneuvered to sell his business and properties for $145 million amid mounting legal and financial pressures, according to a lawsuit filed this week by a Boston developer.
Jay Doherty, chief executive of real estate firm Cabot, Cabot & Forbes, contends in the complaint that Tutunjian approached him last summer about buying 362 taxi medallions, his Boston Cab company, and several properties in the Fenway neighborhood. Tutunjian allegedly explained that competition from Uber and other ride-hailing services was decimating the value of Boston Cab’s business and medallions, and that he had decided “it was time to get out,” Doherty said in his lawsuit, filed in Suffolk Superior Court.
But the developer alleges that Tutunjian ultimately reneged on a series of deals with him, and secretly negotiated with other potential buyers in violation of an exclusivity agreement. Doherty now wants a state judge to force Tutunjian, 67, to sell the Fenway properties to CC&F, plus pay damages for breaching the contract and reimburse CC&F for the money it spent vetting the deal.
Andrew Good, an attorney for Tutunjian and several of his relatives who help run Boston Cab, derided the lawsuit as opportunistic, noting that it was filed on the day Tutunjian was sentenced in federal court in Boston.
“The lawsuit is meritless and improperly motivated,” Good said in a statement. “The Tutunjian family will vigorously defend the lawsuit, and will not succumb to improper pressure tactics. Mr. Doherty’s supposed offer to buy the taxi business was withdrawn not long after it was made, several months ago.”
Good said the family has not agreed to sell the properties, which include the complex where Boston Cab has operated for four decades and a parking garage near Fenway Park. Good did acknowledge that “several parties . . . have offered to purchase certain real estate” the family owns.
Doherty, who provided a copy of his lawsuit but did not respond to further questions, wrote in his complaint that Tutunjian first approached him about buying the cab business and properties in May. That was several months before US prosecutors charged the longtime Boston Cab owner with payroll tax evasion, employing illegal immigrants, and failing to pay overtime wages. Tutunjian pleaded guilty in August and agreed to pay $2 million in fines.
The federal charges stemmed from a 2013 Boston Globe Spotlight Team series that found Boston Cab, part of a business empire then worth about a quarter-billion dollars, routinely exploited its drivers. The reports prompted a raid by IRS agents.
At an initial meeting last summer, Doherty recounted, Tutunjian asked for $150 million for the business, medallions, and Fenway properties.
According to the complaint, Tutunjian said he was “not happy with the way Boston city government was giving favorable treatment to Uber.”
In July, Doherty said, the sides signed a deal that set the sale price at $145 million and pledged to execute a purchase and sale within 30 days.
But then, the complaint said, Tutunjian began changing the terms of the agreement. First, he allegedly told Doherty that he had mortgaged the Fenway properties to secure a $35 million loan from Santander Bank but was worried he could not repay it before the June 2017 due date.
Doherty, whose firm by this time had performed extensive diligence and was in conversations with potential financiers for the purchase, said he agreed to loan Tutunjian the $35 million if he was unable to refinance it.
Soon after, Doherty said, he learned from a Globe report that Tutunjian had transferred the 362 medallions he had supposedly promised to sell Cabot, Cabot & Forbes to his wife, Nancy Tutunjian.
When Doherty confronted the Boston Cab owner, Tutunjian allegedly said there was “nothing to worry about, and that the transfer of the medallions to Nancy Tutunjian was merely a formality [that] did not impact his control over the medallions or his legal right to sell them.”
That transfer to Nancy Tutunjian was initially approved by the Boston Police Department’s Hackney Carriage Unit, but after Tutunjian pleaded guilty in August, officials said they would reassess the transfer.
Asked Friday about Doherty’s allegation that Tutunjian would maintain control of the medallions even after the transfer, a spokeswoman for Boston Mayor Martin J. Walsh said only that city police officials would “look at all relevant information in determining the suitability of potential medallion owners.”
By fall, the sale had begun to disintegrate, according to the lawsuit.
Doherty, whose firm managed development of the Atmark residential complex in Cambridge among many other projects, said he was in discussions with several foreign companies interested in operating the taxicab business when Tutunjian’s representatives suddenly suggested the mogul wanted to lease the garage back and continue running Boston Cab himself.
Tutunjian also questioned CC&F’s financial wherewithal, refused to let Doherty speak directly with Santander Bank about the $35 million loan, and demanded CC&F pay his broker’s fee, according to the lawsuit.
The tycoon even allegedly admitted that he had been shopping the real estate to other firms, identified by Doherty as the Lincoln Property Co. and Equity Residential Co., while offering the taxi business to a “Pennsylvania transportation company.”
Now, Doherty said in his complaint, Tutunjian won’t return his calls after walking away from a refashioned deal in which CC&F would buy only the Fenway properties for $47 million to $50 million.
Saying there is “serious concern that a sale to others will occur before year end,” the developer successfully petitioned the Suffolk Superior Court on Tuesday to tag Tutunjian’s properties on Kilmarnock and Queensberry streets with a so-called memorandum of lis pendens, which will alert any potential buyers and their lenders that the land is the subject of a dispute.
A hearing on the case has not been scheduled.