The case of the failed Carolina Panthers headquarters and mixed-use complex in Rock Hill, South Carolina, has taken an uglier turn.

When GT Real Estate Holdings, the David Tepper-owned company in charge of building the Rock Hill complex for the Tepper-owned Carolina Panthers, pulled the plug on the project earlier this year, it blamed the failure by the city of Rock Hill to fund the needed infrastructure improvements. On Wednesday, the city filed an adversary claim in GTRE's bankruptcy case claiming that GTRE committed fraud by soliciting and agreeing to city bond funding without providing the information or financing needed for Rock Hill to sell the needed bonds, WCNC Charlotte reports.

GTRE and Rock Hill began negotiating for public financing in 2019 to support a Panthers-anchored development district that was initially set to include a hospital complex, hotel and other buildings totaling nearly 4M SF, Rock Hill's complaint states. The city claims that from that point on it consistently told GTRE that it was unlikely to be able to issue enough bonds to satisfy GTRE's plans unless GTRE disclosed more details, accelerated construction or put up more of its own capital.

Construction on the complex started in 2020, and GTRE spent over $170M by the time it halted construction in March and filed for Chapter 11 bankruptcy in Delaware federal court. A separate company owned by Tepper, but also independent of the entity that owns the Panthers, offered to put up $82M to pay off vendors, creditors, York County (which paid $21M for separate infrastructure improvements) and Rock Hill, Axios Charlotte reports.

The city had already paid $20M into a fund controlled by GTRE, but the current arrangement proposed by GTRE puts Rock Hill essentially last in line to be repaid, Axios reports. The city's adversary filing demands a jury trial, repayment of the $20M and the assessment of further damages stemming from the alleged fraud ahead of the acceptance of a bankruptcy restructuring plan.