Jaspan Schlesinger LLP achieved a major litigation victory in the Memorandum Decision rendered by the Honorable Stephen A. Bucaria on October 4, 2016 in the case titled Estate of Spodek v. Estate of Neiss, et. al. (Index No. 32644/1996). The Decision was issued after an 82 day bench trial on claims that were first brought by plaintiff J. Leonard Spodek in 1996. It awards the Spodek Estate monetary damages and declaratory relief in the form of real property interests which, when taken together, can be conservatively valued at a figure that exceeds $100,000,000.
Partners Steven R. Schlesinger and Daniel E. Shapiro tried the case over the span of a three year period while Partner Laurel R. Kretzing oversaw all aspects of the litigation up until trial. Additionally, Mrs. Kretzing and Mr. Shapiro also served as counsel during a 15 day hearing that preceded the trial. That hearing culminated in the Court’s appointment of a receiver to manage six of the multi-family apartment buildings that were the subject of the action. Prior to the receivership, the buildings were operating under the exclusive control of the defendants.
The underlying litigation involved a dispute between two former business partners, J. Leonard Spodek and Bencion Neiss — both of whom passed away during the action itself. At issue were their respective ownership interests in seven multi-family apartment buildings located in Brooklyn New York. Spodek’s claims stemmed from a number of transactions that the parties entered into in the early 1990’s, at a time when Spodek was the subject of many well-publicized housing cases being pursued by New York City’s housing authorites. As a result of both judicial and political pressure that ensued, Spodek was forced to turn over managerial control of a select group of his “crown jewel” buildings. He partnered with Neiss, a real-estate friend of Spodek’s father, to take over management. Neiss, with help from his personal attorney, exploited Spodek’s ongoing troubles with the City and seized upon his new managerial role to wrongfully divest Spodek of his interests in these properties.
In sum, the Court’s decision awards the Spodek Estate certain percentage interests (ranging from 33%-100%) in six of the seven properties that were the subject of the action. Central to the Court’s liability determination was its legal interpretation of language found in a variety of arcane stock redemption agreements crafted by Neiss’ attorney. With the aid of witness testimony, the Court ruled that Spodek never intended to relinquish ownership in the properties and had always maintained a right to redeem such interests. In doing so, the Court rejected the defense theory proffered by Neiss at trial that Spodek’s redemption rights had terminated in the mid 1990’s.
During the course of the litigation (from 1996 up through the present), Spodek received only a marginal portion of income generated from the subject properties. Of note is the fact that the value of these properties appreciated exponentially over the course of the 20 plus year litigation. The buildings are scattered throughout Brooklyn, in markets that are presently booming. For that reason, both the Court’s ownership interest determination and its accompanying monetary damage award are of major significance.