Lawsuit Claims Andersen Construction’s Management Cut Lucrative Deals for Themselves at the Expense of Other Family Members

The widow and granddaughter of the late Portland construction magnate Andy Andersen have filed a lawsuit against the current management of Andersen Construction.

The lawsuit, filed in Mutnomah County Circuit Court on June 6, pits family member against family member and may bring the closure of one the city's oldest and largest construction firms.

Andy Andersen founded the firm in 1950. Today, it employs 1,200 people, according to the Portland Business Journal, and had billings in 2018 of $439 million, making it the city's seventh largest construction firm.

The plaintiffs in the case are Sandra Andersen, who married Andy Andersen in 1982 and remained married to him until his death in 2008; and Brittany Jurj, a Boise resident who is Andy Andersen's granddaughter. (Sandra Andersen is the second-largest of the three shareholders in Andersen Construction. She is the step-mother of two of the defendants and the step-grandmother of a third defendant.)

The defendants in the case are David Andersen, Jurj's father and Andersen Construction's largest shareholder; David's brother Stephen Andersen, the third shareholder; Joel Andersen, who is David's son and Jurj's brother; and a non-family member who works for the company, William Eckhardt.

The lawsuit, filed by Stephen English of the Perkins Coie firm, alleges that over several years, the defendants have have used their positions at both Andersen Construction and a related company called Rosan, which manages the family's extensive commercial real estate holdings in Oregon and Washington, "to engage in illegal and fraudulent activity in the management and control of those companies and their related entities. Despite their secrecy and lack of candor with the plaintiffs, plaintiffs have been able to identify examples of defendants' efforts to enrich themselves at the companies' and minority shareholders' expense."

The lawsuit lists a number of examples of alleged self-dealing, in which the plaintiffs say the defendants took advantage of them:

* The suit alleges that in 2013 the defendants financed a college dormitory in Eugene using company assets and improperly sold it to themselves at below market value without disclosing the project's existence to Sandra Andersen and Jurj.

* The suit alleges that the defendants secretly purchased a rental property in Hawaii with Andersen Construction funds, sold it to themselves and then leased it back to the company in a complex transaction that benefited the defendants.

• The suit alleges that the defendants deceived the plaintiffs about the financial terms of the development and management of the Q21 Apartments, a high-end new project in Northwest Portland, and that the development, construction of management of the Q21 were all done on terms unfair to the plaintiffs.

• The suit alleges that the family member defendants improperly forced Andersen Construction “to provide construction services for their personal residences and other real property belongings, or for the benefit of their friends and other relatives,” and that they compelled Andersen Construction to pay Joel and David Andersen extravagant compensation—$3.2 million for Joel and $2.3 million for David in 2018, about three times their 2017 compensation—while paying out far more modest sums to shareholders.

The lawsuit seeks damages of between $3 million and $10 million.

Josh Ross, of Stoll Berne law firm, who represents the defendants, says the lawsuit lacks merit.

"This is a family issue that, regretfully, has been made public in a very hurtful way," Ross said in a statement. "The allegations are grossly false and rooted in misconceptions. We will let the legal process demonstrate the correct record."