Matters

Brooklyn Bridge Park Developers – Motion for Preliminary Injunction Denied

Herrick successfully defended the developers of a $320 million Brooklyn Bridge Park hotel and condominium project, winning a decision of particular significance to the New York real estate industry as it held that the four-month statute of limitations for challenging administrative determinations cannot be circumvented by couching a complaint as a declaratory judgment action. In a bid to halt the project’s construction, activists filed suit against our clients in New York state court, seeking both an injunction and a declaratory judgment from the court that the planned buildings exceeded height limitations specified in the governing documents for the project. The court denied the motions in their entirety, ruling that the development complied with the law, and further finding that the legal challenge was barred by the statute of limitations for bringing an Article 78 proceeding. A contrary ruling would have paved the way for legal challenges to be made long after government approvals have been obtained for a development project.

In addition to representing our clients on the plaintiffs’ appeal, Herrick is also representing the developers in a new suit filed by activists, now alleging that the project violates a “scenic view district” regulation. Here, we have defeated a motion for a temporary restraining order and are awaiting a ruling on the plaintiffs’ motion for a preliminary injunction. In the meantime, construction on the project continues.

Developer – Successful Defense in Breach of Contract and Fraud Dispute

Herrick successfully defended Muss Development in the Appellate Division, First Department appeal of Princes Point LLC, et al. v. Muss Development LLC et al., a case involving the plaintiffs' breach of a $36 million contract to purchase Princes Point, a 23-acre waterfront parcel of land on the south shore of Staten Island, from Muss. The First Department unanimously confirmed Herrick's earlier Supreme Court, New York County victory for Muss, which entitles the real estate developer to retain the plaintiffs' approximately $4 million deposit plus other fees totaling nearly $1 million. In doing so, the court delved into an area where there was a dearth of case law in New York – namely, whether a prospective real estate purchaser anticipatorily breaches a sale contract by commencing an action against the seller for rescission before the closing date, and whether, in that event, the seller is required to show that it was ready, willing, and able to complete the sale. The court held that the plaintiff had anticipatorily breached the contract and that Muss is entitled to keep the deposit and other significant fees without having to show that it was ready, willing and able to close. Once there was a breach , there was no need to spend time and money preparing for a closing that was not going to happen.

Fashion Designer – Flagship Manhattan Store Leasing Dispute

Working with co-counsel, Herrick obtained a number of favorable rulings involving millions of dollars on behalf of a leading fashion designer as plaintiff in litigation with the landlord of its flagship Manhattan retail location. Prior to reaching a settlement, victories on behalf of the client included a ruling enjoining the landlord from terminating our client’s lease, an order that our client continue paying the current rent under the lease rather than the much higher amount requested by the landlord, and a decision rejecting the landlord's motion for our client to post an $83 million bond “for lost opportunity damages” related to plans to demolish and redevelop the site, and instead requiring a bond of only $750,000. The dispute was resolved in a settlement, pursuant to which the client obtained a new, long-term lease.

Real Estate Owners – “Baseball Arbitration” and Litigation over Valuation and Buy-out of NYC Shopping Center

Herrick delivered a major victory to real estate owners in a "baseball" arbitration that resolved a dispute between partners over the valuation of a New York City shopping center that they co-owned. Prior to Herrick's involvement, the opposing party had won the right to buyout our clients' interest in the retail center, with the purchase price to be set based on a neutral appraiser's determination as to which party's appraisal was more accurate. The firm achieved two decisive victories on behalf of our clients in New York Supreme Court, obtaining an order that the appraisal process move forward immediately and then that the "date of valuation" was to be current rather than locked in 2012 as the other side had argued. Thereafter, two months of extensive appraisal proceedings ensued, and our valuation was ultimately chosen over the opposing party's assessment, which was many millions of dollars lower.

Mezzanine Lenders – Stuyvesant Town-Peter Cooper Village Litigation

Herrick and co-counsel successfully represented junior lenders in litigation related to the foreclosure of Stuyvesant Town-Peter Cooper Village, Manhattan's largest housing complex, which our clients alleged was based on a flawed premise, designed to provide an unjust windfall of approximately $1 billion to the defendants at the expense of junior lenders. This litigation, fought primarily in New York state court, was ultimately settled in an agreement that resolved all claims between the parties and helped clear the way for a future sale of the complex.

Manhattan Developer – Construction Delay Issues

Advising one of the premiere developers of Manhattan luxury residential condominiums in connection with a construction agreement and construction delay issues involving the general contractor and a subcontractor on a new $450 million luxury condominium tower.

Specialty Finance Company – Summary Judgment Upheld on Appeal

Herrick secured an appellate win for a specialty finance company, successfully defending the trial court's decision granting our motion for summary judgment and awarding money damages with costs. The underlying dispute involved a borrower’s failure to pay a multi-million dollar participatory interest - a percentage of the collateral’s appreciation - in addition to a fixed interest monthly payment under the terms of a $16 million credit arrangement to finance the purchase of taxi medallions. The Appellate Division, First Department affirmed the trial court’s decision, rejecting the borrower’s counterclaims that the participatory interest provision to which it had agreed violated New York law and the federal Small Business Investment Act of 1958.

Lender and Special Servicer – $126 Million Mortgage on Miami’s Shore Club Hotel

Represented the lender and mortgage servicer in litigation against a hotel developer filed in Nassau County Supreme Court and in the Appellate Division, Second Department. The underlying dispute involved an action filed by our clients in Florida seeking to foreclose the $126 million mortgage on the Shore Club Hotel in Miami, and the hotel developer's ultimately unsuccessful attempts to derail that action. Having slipped a purchase option into a hotel tenant's lease, which purported to convey to the tenant a right to purchase the mortgage loan at fair market value, the developer then "purchased" the option from the tenant and sought to enforce that option in the Florida foreclosure action. On the eve of an expected adverse ruling in Florida, the developer brought its claim to Nassau County, where the trial court granted a preliminary injunction, effectively preventing our clients from foreclosing the mortgage. We filed an appeal and obtained a reversal, resulting in the dismissal of the Nassau County action. Leave to appeal was denied by New York's Court of Appeals.

New York State Association for Affordable Housing – Challenge to Local Law 44

Representing the New York State Association for Affordable Housing and individual developers in litigation seeking to invalidate Local Law 44 - which requires any developer receiving city funding to submit quarterly wage reports - as unconstitutional, pre-empted by New York state law, and imposing an unreasonable economic burden on small businesses competing for affordable housing work.

DataTreasury and Company Executives – Defense of $185 Million ‘Pay to Prosecute’ Lawsuit

Herrick and co-counsel negotiated a favorable settlement for DataTreasury and two of the company's executives, bringing to an end a $185 million dollar lawsuit filed by Long Island attorney Robert Del Col and his client Ted Doukas against multiple defendants, including our clients and former Nassau County District Attorney Kathleen Rice. The complaint, filed by plaintiffs who had been involved in a dispute over patent royalties with DataTreasury, alleged that the plaintiffs' arrest and indictment for grand larceny had been motivated by campaign contributions made by the company to the Nassau County District Attorney's office. Following the court's dismissal of several of the plaintiffs' claims, this litigation was settled in an agreement that contemplated no admission or finding of wrongdoing by any defendant and for a small fraction of the damages claimed.

Affordable Housing Developer – Resolution of Breach of Contract Claims against NYCHA

Negotiated a favorable settlement on behalf of a national developer of affordable housing, resolving a breach of contract litigation against the New York City Housing Authority related to a high-profile and long-stalled project to redevelop a large New York City public housing complex.

Inter-Dealer Brokerage Firm – $500 Million Raiding Case

Represented the affiliate of a billion-dollar inter-dealer brokerage firm in a large "key employee raiding case" brought by a competitor whose stock market valuation declined 24% (approximately $450 million) on the day following our client’s hire of approximately 20 of its credit derivatives brokers and employees. Following an intense oral argument by Herrick and other firms aligned with our client, a New York Supreme Court denied the plaintiff’s motion for a temporary restraining order and later denied a motion for preliminary injunction in rulings which allowed the subject employees to work for our client. The dispute then moved to a FINRA arbitration where we defended hundreds of millions of dollars in claims. After more than 240 hearing sessions, the matter was fully settled and all claims withdrawn.

Successful Challenge to Arbitration Award in $42 Million Dispute

Herrick successfully argued for the overturning of an arbitration award in a $42 million dispute over the proper distribution of an estate - an especially notable win for our client as arbitration awards are so difficult to vacate. Based on the arbitrator's violation of a little-known New York state law that invalidates arbitration proceedings held on a Sunday, the court ruled that the arbitration proceedings and award were void, and also found that the arbitrator had exceeded the scope of its power when it imposed a legal fee penalizing any party challenging the award when the parties had never agreed to such a provision. Additionally, the court found that the award involved distribution of estate assets which can only be distributed by the Surrogate's Court.

Taxi Medallion Financing Company – $27.5 Million Judgment

Represented a large specialty financing company in enforcing a series of agreements that provided the company with an interest in the appreciation of the underlying collateral. Following extensive briefing on a summary judgment motion, the court rejected defenses based on usury and the Small Business Investment Act and issued a $27.5 million judgment in favor of our client.

DataTreasury – Appellate Court Upholds Dismissal of Complaint Seeking $15 Billion in Damages

Secured a victory for DataTreasury and its officers before the Appellate Division, Second Department, obtaining a ruling affirming the trial court's dismissal of a complaint seeking $15 billion in damages filed by a purported joint venture partner claiming fraud and the alleged breach of an oral joint venture involving a patent for check imaging technology. In affirming the dismissal, the appellate court held that the breach of contract claim was time barred, and that the fraud claims lacked the requisite specificity and were duplicative of the breach of contract claims.

DataTreasury Corp. – $100 Million Dispute with Former COO

Successful defense of DataTreasury Corp. in a 41-day bench trial arising from claims by the company's former Chief Operating Officer that he was entitled to exercise certain stock options granted to him during his tenure. We helped obtain a decision dismissing all of the former executive's claims based on his disloyal conduct in trying to usurp business opportunities coupled with his failure to properly exercise the options, and defeated the plaintiff's multiple post-trial motions.

Staten Island Retail Center Complex Development

Representing the Alpert family in connection with the development of a large shopping center complex in Staten Island. Our work includes a significant Uniform Land Use Review Process application involving street mappings, special permits, government relations activities and an environmental impact statement.

Technology Company – Licensing Dispute

Representing the developer of an innovative insurance product in litigation filed in New York State court arising from the alleged breach of a licensing agreement giving our client exclusive access to certain data that serves as the foundation for the new product.

Developer – Dispute with the City of Long Beach, New York

Representing a real estate owner/developer in a high-profile dispute with the City of Long Beach, New York over zoning ordinances relating to a planned four tower condominium project. Herrick helped secure an appellate win permitting our client to seek monetary damages against the city in this litigation which also seeks a judgment declaring that our client is entitled to a building permit that would allow completion of the ocean front development as originally approved.

Real Estate Executive – Public Corruption Prosecution

Representation of a business executive charged by the U.S. Attorney's Office for the Southern District of New York with conspiring to bribe a public official and money laundering. Resulted in the U.S. Attorneys' Office determining to drop all charges against our client.

Major International Technology Company – Government Procurement Assistance

Assistance to a multi-billion dollar technology company which provides automated time and attendance systems in its dealings with the City of New York's technology officials.

REIT – Office Building Settlement

Representation of a major, publicly-owned REIT in obtaining a favorable settlement in a multi-million dollar litigation related to cleaning and maintenance services at four large office buildings in New York City. 

Small Hotel Owners Association – Regulatory and Legislative Advice

Representation of the Small Hotel Owners Association in its dealing with the New York City government. We counsel the association and its members on how to respond to the city's efforts to regulate the industry. We negotiate legislation and zoning changes and advance the industry's interests before the relevant city agencies and elected officials.

Private Company – Political Misuse Investigation

Representation of a private company in connection with a state Attorney General's investigation into whether a former governor improperly used the company to engage in "dirty tricks" against a political rival.

Robert W. Seavey – Victory in $500 Million RICO Case

Representation of Robert W. Seavey, real estate developer and owner, in obtaining a U.S. District Court summary judgment dismissing a $500 million RICO case. The suit also named members of his family, the management company and accounting firm. The court found that the plaintiffs and their forensic accounting firm had failed to find any evidence supporting their claims. The decision appears to be the first New York decision that found that the federal bank fraud statute cannot serve as a predicate act in a RICO case when the plaintiff is not a financial institution. All state court claims were dismissed.

Joseph Kahan – Arbitration Award Vacated

Representation of Joseph Kahan in successfully petitioning the Kings County Supreme Court to vacate a rabbinical court's arbitration award regarding competing claims to real properties in Brooklyn and other assets. The arbitration agreement provided that the parties could proceed only with counsel acceptable to the arbitrators. Kahan participated in the arbitration even after the arbitrators rejected his proposed counsel and insisted that he could proceed only with counsel they would select for him. Initially, Kahan proceeded without counsel at all, but as the matter progressed, he realized that the arbitrators' procedures were unfair and he withdrew from the arbitration before the panel ruled. Describing its ruling as one of first impression under New York law, the court agreed that the arbitrators had denied Kahan the right to counsel of his choice, and overturned the award. This case was featured in the November 24th 2009 edition of the New York Law Journal. (26 Misc.3d 615, 889 N.Y.S.2d 839 (2009))

Major Publicly-Owned REIT – Settlement

Representation of a major, publicly-owned REIT in reaching a favorable settlement with a prospective 400,000 square foot tenant of a proposed major office building, arising from the REIT's decision to suspend development due to condition of the local real estate market.

Las Vegas Conference Center Real Estate Investors – Arbitration Victory

Representation of one of three investor groups in an existing five million square foot conference and exhibit center in Las Vegas in a seven-week, three-panel arbitration over each investor group's rights and ownership in the project. The panel found that all parties to the transaction, except Herrick's clients, had engaged in wrongful conduct. The conference center, at its completion, will cost more than $1 billion to build and is planned to expand to 12 million square feet.

Financial Media Company – Lease Dispute

Representation of a multi-billion dollar financial media company in a lease dispute involving approximately 180,000 sq. ft. of office space.

New York Residential Brokerage Company – Successful Mediation

Representation of a prominent New York residential brokerage company in a successful mediation against a civil rights suit alleging conspiracy with building owners to steer families with children away from apartments.

R.I. Island House LLC v. North Town Phase II Houses, Inc. – Mitchell Lama Contract Dispute

Representation of a major developer in enforcing a $100 million contract to sell a Mitchell Lama project on Roosevelt Island, New York. The trial court dismissed our complaint, but the Second Department, relying on our legal arguments, reversed the lower court and permitted the claim for specific performance to move forward. (R.I. Island House LLC v. North Town Phase II Houses, Inc. (2nd Dep't, May 2008)).

Religious Corporation – Control Dispute

Representation of the interests of an heir to the leadership of a major religious corporation in fending off a challenge from a rival faction for control of the community's institutions and organizations. In the Matter of Congregation Yetev Lev D'Satmar Inc., 31 A.D.3d 541 (2d Dep't 2006), aff'd, 9 N.Y.3d 282 (2007) and Congregation Yetev Lev D'Satmar of Kiryas Joel, Inc. v. Congregation Yetev Lev D'Satmar Inc., 31 A.D.3d 480 (2d Dep't 2006).

Tire Manufacturer – Antitrust Litigation

Represented a tire manufacturer in successfully defending an antitrust suit brought by an authorized dealer claiming that the manufacturer failed to make a tire available to the dealer that it made available to other authorized dealers.

Real Estate Board of New York – Mitchell-Lama Litigation

Representation of the Real Estate board of New York in its successful lawsuit against the New York City Council to overturn Local Law 79. The law required owners of Mitchell-Lama housing and housing subsidized by certain federal programs to give a right of first refusal to purchase their projects to tenants, pursuant to an ambiguous and burdensome process. The Court found that the law was preempted by federal and state housing laws, and enjoined the City from enforcing it.

New York City Restaurant – Employment Issues and Audit

Representation of a famous New York City restaurant in employment issues and a Department of Labor audit.

Real Estate Developer – Mixed Use Conversion

Successful representation of a developer in litigation over its right to convert a building it purchased from office/retail use to mixed office/retail and residential use.

Estate Trustee – Removal Litigation

Representation of the trustee of an estate in litigation with the trust's settlor. The settlor sued to remove the trustee, whom he had appointed, alleging conflict of interest and failure to account. The trial court dismissed the suit, and Herrick represented the trustee in successfully defending the appeal.

Manufacturing Company Executive – Internal Investigation

Representation of the former Executive Vice President of a large manufacturing company in an internal investigation of alleged materials theft.

Subsidized Housing Project Sponsor – Market Rate Conversion

Representation of a sponsor in settling a litigation involving the sponsor's effort to convert one of New York City's largest Mitchell-Lama subsidized housing projects (some 1,200 units on Manhattan's Upper East Side) to market rate housing. The settlement involved the creation of entirely new subsidy programs by the city and by the sponsor, and an approximately $550 million condominium conversion.

Asphalt Contractor – Post 9/11 Reconstruction Bidding Dispute

Representation of an asphalt contractor in challenging the bidding procedure used by New York City and utility companies to award significant street reconstruction work near the World Trade Center site after the September 11th terrorist attacks. We obtained several temporary stays on the grounds that the bidding procedure violated public procurement laws. The city cancelled its invitation to bid and used a different procurement procedure.

Former Government Official – Conflict of Interest Investigation

Representation of a former senior official of New York City's Economic Development Corporation before the city's Conflict of Interest Board in connection with publicly reported allegations of improprieties.

Telecommunications Equipment Company – New York City Comptroller Investigation

Representation of a major telecommunications company in a high-profile investigation by the Comptroller of the City of New York into the sale of two-way radio equipment. We obtained full payment of multi-million dollar invoices for the company.