"Notwithstanding this fact, GSG charged forward and exhausted the entire $41-million pre-construction budget, while sales of units at the project languished," Harcourt states in its motion to dismiss. "Harcourt Nevada became extremely concerned with GSG's management of the company and continual requests for additional funds."

Harcourt claims that the parties exchanged correspondence for several months, attempting to resolve their differences. On April 8, 2008, Harcourt says it requested that GSG stop expending money on the project until market conditions improve and construction financing is available on more reasonable terms than present. GSG filed its lawsuit on April 30 and Harcourt was served at the end of May.

Glen, Smith & Glen contend in their lawsuit that it performed under the agreement, successfully marketing the project, "resulting in substantial sales of condominiums and leasing of retail property within the development." Also pursuant to the agreement, the lawsuit contends that Glen, Smith & Glen "consistently presented budgets to Defendant Harcourt, spent within those budgets, and assured that all marketing costs were approved by Harcourt."

Harcourt defaulted on its funding obligations in October 2007, according to the lawsuit, by failing to timely provide sufficient funding for development and construction of the project, and failing to fund the overhead for Glen, Smith & Glen to the project. In response to repeated demands, the defendants "repeatedly promised that funding was imminent," and as recently as February 2008 Harcourt principal Patrick Doherty "personally met with Plaintiffs" and assured them that Harcourt "would satisfy its funding obligations in twenty-four hours."

Believing Doherty, GSG negotiated with vendors and consultants to obtain more time to pay, according to the lawsuit. The money never came however, resulting in, among other things, "lawsuits and mechanic's liens from contractors, vendors and consultants to the project. Further, this failure resulted in significant damage to Glen, Smith & Glen's reputation in the Las Vegas business community and has placed the partnership in default under its various financial commitments."

Harcourt's local attorney Steve Morris was not immediately available Tuesday for comment. Regardless, if anyone is at fault, the lawsuit has prevented Harcourt from moving forward on a project in Jersey--an island off the coast of Normandy, France--that is part of the Balliwick of Jersey, a British Crown dependency. Government there delayed the approval of a public-private development agreement with Harcourt after discovering that Harcourt officials denied the existence of the Sullivan Square lawsuit to the Jersey government, according to a recent story in the Jersey Evening Post.

In a related story in the Jersey Evening Post, Harcourt strongly denied all the allegations relating to the Sullivan Square project. In a statement released to the newspaper, Harcourt director Patrick Power said: "Any formal proceedings will be vigorously defended by Harcourt's Nevada subsidiary as we maintain that they are entirely without merit."