Lender – Denial of Intervention Motion Filed By Borrower’s Co-Manager Upheld on Appeal
The Appellate Division, First Department, unanimously affirmed the denial of a motion filed by a borrower’s co-manager seeking leave to intervene in a lender’s debt enforcement action under a demand note in order to assert direct and derivative claims and defenses on the borrower’s behalf. The motion was filed after the proposed intervenor’s husband and co-manager, shipping magnate Spiros Milonas, settled the action on behalf of the borrower by confessing judgment for the principal amount of a substantial loan.
Phoenix Capital Finance Ltd. v. Axia Realty LLC, 2019 WL 3069368 (Sup. Ct. N.Y. Co. 2019), affirmed 2020 NY Slip Op. 3610, 2020 WL 3454610 (1st Dep't 2020).
Telecommunications CEO – Dismissal of Securities Class Action
Represented the former CEO of a public telecommunications company in two securities fraud class actions stemming from the company's bankruptcy. The first complaint alleged fraud in connection with disclosures about the company's credit facility. The plaintiffs then filed a second class action alleging that our client engaged in accounting improprieties and caused the company to issue false financial statements. The court granted our motion to dismiss the second complaint, and we were able to obtain a settlement of the entire matter on terms that were very favorable to our client.
NFL Franchise – Class Action
Represented a national football league team in a class action.
Israeli Defense, Aerospace and Aviation Company – Action Dismissed for Lack of Jurisdiction
Obtained dismissal of all claims asserted by a former employee against the largest Israeli defense, aerospace and aviation company. The plaintiff attempted to establish personal jurisdiction over the Israeli company in New York based on a theory that its wholly owned subsidiary operates as its domestic branch or “mere department” in the United States. While the trial court allowed the plaintiff to begin jurisdictional discovery, the Appellate Court reversed the trial court and dismissed our client from the litigation for lack of jurisdiction.
Chelsea Building Owner – Successful Enforcement of Surrender Agreement
Achieved a $1 million victory on behalf of a Chelsea building in an action to enforce the strict terms of a surrender agreement for prime retail space in Manhattan’s Chelsea neighborhood. On summary judgment, the Supreme Court, New York County, determined that a commercial tenant breached its contractual obligation to vacate our client’s prime, street level space, ordered the return of an unearned termination fee (including an $800,000 deposit in escrow and $200,000 cash advance), and awarded interest and attorneys’ fees.
Property Owner – Breach of Contract Dispute
Represented a property owner on claims arising out of a breach of lease and supply agreement. The client leased property to a tenant for the purpose of operating a gas station on the property. The lease prohibited the tenant from subleasing without landlord consent. The lease also contained provisions requiring the tenant to buy petroleum products from the owner. The tenant violated the terms of the lease and supply agreement when it allowed a sub-tenant to occupy the premises and purchased petroleum products from another party. Herrick moved for and was granted summary judgment on the claim for breach of the lease agreement. The remaining claims were thereafter settled.
Non-Profit Organization – Litigation against Former Board Members
Achieved an important victory on behalf of a non-profit pro-bono client asserting claims against several former board members who had used their positions of trust to loot the organization for their own personal gain by misappropriating funds from the client’s operating accounts, gaining control of the organization's Harlem apartment buildings, misappropriating rental income from those properties, and ultimately selling one of the buildings for their own benefit. Herrick successfully argued a motion for a preliminary injunction, obtaining an order from the court enjoining the defendants from holding themselves out as officers of the non-profit, and requiring them to return the organization’s apartment buildings to our client’s control.
Specialty Food Retailer – Business Divorce Litigation
Secured a temporary restraining order on behalf of the co-owner of a specialty food retail business preventing partners in the venture from withdrawing company funds or transferring company assets prior to the resolution of ongoing litigation seeking dissolution of the business.
Corporate Barter Company – Successful Settlement
Represented a corporate barter company defending against claims that it misappropriated confidential information. The claims arose by reason of the client’s hiring of a competitor’s employee. Herrick answered the complaint and filed counterclaims alleging tortious conduct by the competitor. The case was settled following mediation to the client’s satisfaction.
Restaurant Owner – Disputed Purchase Agreement
Representation of a property and business owner in an action arising out of the sale of a restaurant. The purchaser was unable to afford the full purchase price and entered into an agreement whereby monthly rental payments would go towards paying the purchase price. The purchaser was unable to make the monthly rental payments. In accordance with the terms of the agreement, the seller reclaimed ownership. The purchaser filed a lawsuit alleging various claims based in tort. Those claims are currently being litigated.
Title Insurance Company – Insurance Coverage Claim
Successfully defended a title insurance company in an action brought by a commercial property owner by obtaining dismissal of all claims on a motion to dismiss and defeating a motion to reargue.
Commercial Property Insurer – Summary Judgment Granted in Commercial Property Insurance Coverage Litigation
The Eastern District of Tennessee granted summary judgment to our client, a property insurer, in an insurance coverage dispute. The District Court held that the commercial property insurance policy at issue was void for lack of an insurable interest following the sale of the covered apartment building by the insured without notifying our client, the policy was not assignable without our client's written consent, and the purchaser was not an assignee or an intended third-party beneficiary of the policy. The purchaser appealed, however the Sixth Circuit Court of Appeals affirmed the decision by the Eastern District of Tennessee granting summary judgment to our client.
Insurance Coverage Dispute – Partial Summary Judgment Granted
Achieved partial summary judgment in favor of insurer client ruling that the “absolute pollution exclusion” in a commercial general liability insurance policy should be applied to exclude a claim of bodily injury caused by carbon monoxide in a home. The court found a question of fact as to whether an exception to the exclusion applied, and the case will proceed on that limited issue.
You can read more about this matter here.
Sears Holdings Corporation, et al. v. Lampert, et al. (Bankr. S.D.N.Y.)
Serving as Co-Counsel to the Official Committee of Unsecured Creditors, on behalf of Debtors’ estates, in lawsuit asserting fraudulent transfer, breach of fiduciary duty, and related claims in connection with prepetition transactions totaling billions of dollars.
Defeated Zoning Challenge to Construction of Residential Tower
Successfully represented owner/developer of 32-story residential tower on Upper East Side in defeating zoning challenge and lawsuit brought by community groups and elected officials.
Successful Prosecution of Breach of Operating Agreement in Real Estate Partnership
Represent international real estate investment firm in dispute with partner/co-owner of commercial building on Upper West Side over a contractually-negotiated share of leasing proceeds. On summary judgment, Court awarded all monetary relief demanded and declaratory relief in client’s favor.
Zoning Resolution Dispute With Developer
Represent ground lessor in action to enforce and declare consent rights as “party-in-interest” under New York City Zoning Resolution in dispute with developer planning to construct residential tower in the “Two Bridges” neighborhood of Manhattan.
Commercial Real Estate Tenants – Pre-Discovery Summary Judgment Ruling Granting Specific Performance of Lease with Purchase Option
Represented Split Rail Holdings, LLC, tenants of a commercial real estate building in the Lower East Side and secured a victory on a pre-discovery summary judgment motion, obtaining specific performance of the lease, allowing Split Rail to purchase the property for $6.3 million. The decision was affirmed by the Appellate Division, First Department.
Hedge Fund Investors – Litigation Against Hedge Funds’ Auditors and Administrator
Representing 95 investors, who invested over $100 million into now-defunct hedge funds, in an action against the funds’ auditors and administrator, asserting claims for breach of contract, breach of fiduciary duty and negligence.
Leading Telecommunications Company – Successfully Defeated an Action at the Motion to Dismiss Stage
Herrick successfully defeated an action at the motion to dismiss stage for its client, a leading telecommunications company. The plaintiff, a public works contractor, sued the telecommunications company for over $2.2 million.
In opposing the motion, Herrick explained that whenever “interference work” is anticipated or involved in conjunction with a City project, the contract includes an addendum called “Section U” (or a specific directive from the City) that identifies what specific work is anticipated. The absence of a Section U addendum in the City contract confirmed that the telecommunications company had no obligation to pay for any protection work that was not agreed upon.
In his comprehensive 20-page decision, Justice Joel M. Cohen adopted all of our arguments, including on the relevance of Section U. This is particularly noteworthy because Courts rarely address these issues.
Represented Real Estate Owners in New Jersey Attorney General, Division on Civil Rights Investigation and Administrative Action
Represented owner of residential properties in the successful conclusion of proceedings and investigations brought by the New Jersey Attorney General, Division on Civil Rights for allegations of discrimination in housing.
Leading Special Servicers of CMBS Debt – New Jersey Real Estate Dispute
Representing four (4) leading special servicers of CMBS debt in connection with 18 defaulted loans secured by multi-family apartment buildings located throughout New Jersey. When the principal of the borrowers abandoned the properties, Herrick applied in federal court for appointment of a receiver to manage the properties. That application was successful, and a receiver was appointed. Once the receiver was in place, Herrick then commenced foreclosure actions in state court with respect to all of the 18 loans. Judgments have been obtained in all of the foreclosure actions and over the last year, the Herrick team has utilized a number of creative strategies to pursue the clients’ interests, including facilitating the sales of a number of the properties through the receivership (with the clients receiving the proceeds of such sales), and pursuing title to the balance of the properties through foreclosures sales. This matter is ongoing.
New Jersey-based Food Manufacturer – Leasing Dispute
Representing a New Jersey-based food manufacturer in an action brought against its landlord on a commercial lease for its warehouse at in Franklin Township, New Jersey. Our client seeks damages caused by breaches of various provisions in the lease related to the preparation of the previously-vacant building for occupancy and the build out of office space in the warehouse. The landlord filed a counterclaim asserting that our client breached the lease by applying a purportedly defective coating on the warehouse floor, and also seeking attorney’s fees and unspecified indemnification costs. This matter is ongoing.
New Jersey-based Nursing Home Facility – Leasing Dispute
Represented the defendants in a dispute where the parties had contracted for a long-term lease of a nursing home facility, representing several million dollars of rent. After our clients ultimately decided not to move forward with the lease, they negotiated a settlement that included a general release with the owner of the facility. Notwithstanding that, the facility owner subsequently filed suit in the Superior Court of New Jersey for eight separate causes of action, including breach of contract, tortious interference, and fraud in the inducement. In its complaint, the plaintiff also argued that the release was unenforceable because it was procured by economic duress. Herrick filed a motion to dismiss, arguing that the plaintiff did not plead the existence of economic duress at the level necessary to set aside the release. The court agreed with Herrick, dismissed the complaint without prejudice, and ordered that any refiled complaint contain specific facts with respect to the exact nature and extent of the economic duress at the time the release was given. This was a major victory in that there are very few New Jersey cases where a release has been enforced on a motion dismiss in the face of a claim of economic duress.
Long Island Property Owners – Eminent Domain Related to Ronkonkoma Hub Project
Herrick is currently representing property owners under the threat of eminent domain takings in property sale negotiations with the developer of The Ronkonkoma Hub project located in the Town of Brookhaven, Long Island. We represent these owners and operators in all aspects of these negotiations with the Town of Brookhaven and the developer, whether it be a sale in lieu of condemnation or a claim for additional compensation in eminent domain litigation. This project has been in the works for many years and is currently in Phase 2 of the overall development.
Australian Public Company – Misrepresentation Against U.S. Financial Institution
Representing the former Chief Executive Officer of an Australian public company alleged of misrepresentation against a U.S. financial institution in connection with the sale of securities in certain securitized loans.
Asia-based Investors – Favorable Settlement in Insider Trading Case
Represented two Asia-based investors indicted and sued in insider trading cases. Succeeded in preventing extradition and having all SEC and criminal charges dropped in a very favorable settlement for our client.
Long Island Railroad – Third Track Project
Herrick is currently representing owners of property acquired by eminent domain in the LIRR Third Track Project. Formally known as the LIRR Expansion, the project’s goal is to construct a 10-mile long third track on the Long Island Railroad Mainline. The project includes the elimination of eight street-level crossings along the LIRR Main Line, to be replaced by grade crossings with newly constructed bridges that will hold three tracks, and a two-lane underpass for vehicular traffic that also includes a pedestrian sidewalk. Herrick’s clients have had all or portions of their property seized by the New York State Department of Transportation and the MTA by way of eminent domain. Herrick is currently advocating for additional compensation for these property owners in the New York State Court of Claims.
Hudson Yards Redevelopment Plan – Manhattan, NYC
Herrick currently represents property owners and business tenants in the Hudson Yards Redevelopment Plan project. The project affects the area of Manhattan located between 29th and 43rd streets, and 7th Avenue and Hudson River Park. The project goal is to create a mixed-use expansion of the Midtown Central Business District, expand the Number 7 MTA subway line, rezone to permit new residential and commercial space and expand the Jacob Javits Convention Center. Herrick’s clients are slated to have their properties taken by eminent domain in connection with the project. Herrick expects to file claims for additional compensation for the seizure of property, as well as for the seizure of trade fixtures owned/installed by commercial tenants.
Downtown Brewster Urban Renewal – Putnam County, NY
Herrick is representing owners whose properties will be seized by eminent domain in connection with the downtown Brewster redevelopment plan. The Brewster redevelopment project consists of the revitalization of the blighted area situated in downtown Brewster, Putnam County, NY. Herrick’s clients are being asked to sell their properties to the developer for this project under threat of eminent domain. We represent both owners and commercial tenants (who have their own claims for compensation, separate from their landlords) in all aspects of negotiation with the Village of Brewster and the developer, whether it be a sale in lieu of condemnation or a claim for additional compensation in eminent domain litigation.
Retailer – Leasing Dispute
Represented a children’s retailer in a suit brought by the Metropolitan Transit Authority (MTA) for back rent and future rent (with personal liability) of almost half a million dollars on its lease at Grand Central Terminal. The Herrick team negotiated a favorable settlement on behalf of the client.
Commercial Landlord – Leasing Dispute with International Retailer
Herrick delivered a major victory to a commercial landlord against a billion-dollar international retailer with more than 500 stores worldwide. The retailer sought rescission of its lease based on claims of mutual mistake, breach of contract, breach of duty to cooperate and breach of implied covenant of good faith. The court denied the tenant's motion to amend its complaint to allege impossibility, frustration of performance, constructive eviction, as untimely. Herrick successfully showed that the landlord was not required to do the work for the tenant or to obtain all necessary permits. Herrick believed that the retailer's real motivation for abandoning the space was a corporate decision to open a larger store at a different location. The court found that the retailer failed to conduct proper due diligence as to the necessary certificate of occupancy, the tenant took the premises "as is" and the landlord made no representation to permitted uses. The court dismissed every one of the claims against the landlord. Furthermore, the court granted the landlord a judgment of over $13 million dollars for unpaid rent, plus interest and attorneys fees, bringing the total expected judgement to over $20 million dollars.
International Arbitration Dispute
Successfully defended an international manufacturer against a complex, multi-million dollar breach of contract claim brought by a U.S. trading company involving the sale of petrochemicals. The case primarily concerned whether a contract was formed under the UN Convention on Contracts for the International Sale of Goods (the CISG) or the UCC. The representation included a seven-day trial involving multiple fact and expert witnesses.
Investment Advisor – Department of Justice, SEC Investigations, and 9 State Attorney General Investigations
Represented an SEC registered investment advisor to several private equity funds with over $1.0 billion in assets under management, in connection with investigations of alleged securities law violations by the DOJ, the SEC and state securities regulators.
JMH Development – Dispute Over Luxury Residential Development
Herrick achieved a significant victory for JMH Development, the managing member in a joint venture created to develop a luxury residential development in Miami, Florida, in a dispute against PSB, the joint venture’s partner, who asserted false claims including breach of contract and fiduciary duty, among others. After a lengthy and contentious litigation culminating in a 3-day bench trial, the court ruled in favor of JMH Development on every single claim and issue and dismissed the case.
Wolf Haldenstein – Dispute with Manhattan Landlord
Achieved significant award for Herrick client, the highly-respected plaintiff's class action law firm Wolf Haldenstein Adler Freeman & Herz LLP, in a dispute with their Manhattan landlord. The landlord failed to properly renovate Wolf Haldenstein's office space as outlined in their lease agreement, thus leaving the office in an unsuitable condition for people to work in. The court affirmed that the landlord and its affiliates failed to properly renovate office space leased by Wolf Haldenstein and dismissed the landlord's counterclaim for allegedly owed back rent. The court also awarded Wolf Haldenstein attorney fees.
Institutional Trader – Asset Recovery
Representation of institutional trader who was victimized in a Ponzi Scheme in order to recover assets that were defalcated.
International Broker Dealer – DOJ and SEC Investigations, Federal Trial
Represents major international broker dealer in connection with DOJ and SEC investigations, and federal criminal trial against founder of publicly traded company for, inter alia, creating false earnings to inflate the price of the company’s stock.
Pharmaceutical Company – Consumer Fraud Class Action Dismissed with Prejudice
Achieved a significant victory in New Jersey federal court on behalf of a pharmaceutical company, securing the dismissal of our client from a putative class action alleging violations of consumer fraud laws in the marketing of product. Finding that the plaintiffs had failed to remedy basic pleading deficiencies in their original complaint, dismissed for lack of jurisdiction and failure to state a claim, the court dismissed the amended complaint with prejudice since “further amendment would be futile.”
Commercial Liability Insurer – Third Department Affirms Summary Judgment in Favor of Herrick Client in Environmental Coverage Litigation
The New York Appellate Division Third Department affirmed the Supreme Court's dismissal of all claims against a liability insurer in an environmental coverage litigation brought by the State of New York, arising from a petroleum discharge from an upstate New York gas station. Agreeing that coverage was excluded under our client’s liability policies, the court granted our motion for summary judgment while denying summary judgment motions brought by two of the other liability insurers of the company that supplied petroleum to the station, which the State had claimed was the responsible discharger under the NY Navigation Law.
Commercial Bank – All Claims Dismissed in Litigation over Failed Loan
Negotiated a settlement on behalf of a commercial bank resulting in the voluntary dismissal of all claims filed in a New Jersey state court by an asset manager seeking to hold the bank responsible for losses on a failed loan made to a furniture business prior to the business’ bankruptcy filing. Claiming that it had been induced into extending the loan based, in part, on a multi- million revolving credit line extended to the business by our client, the plaintiff argued that the credit line and our client’s alleged failure to adequately monitor the business gave the plaintiff the impression that the business was is better financial shape than it was. Following Herrick’s filing of a third-party complaint, repeated motions to dismiss and an aggressive discovery, the plaintiff dismissed its claims against our client without any payment or admission of wrongdoing while negotiating settlements from the remaining defendants.
Google Inc. – NJ Appellate Division Affirms Summary Judgment
Represented Google Inc. before the NJ Appellate Division, which affirmed summary judgment granted by the New Jersey Superior Court in favor of Google, dismissing claims by an online merchant for breach of contract and the covenant of good faith and fair dealing. The appellate court upheld the terms and enforceability of Google’s online merchant "click-wrap" agreement, including its liability limitations, while rejecting plaintiff’s claim that it was an unenforceable contract of adhesion. D’Agostino v. Appliances by Phone, Inc., et al., 2016 N.J. Super. Unpub. LEXIS 504 (Mar. 8, 2016).
Professional Baseball Team – Summary Judgment in Breach of Contract Dispute
Represented a professional baseball team in securing summary judgment in a federal court litigation arising from the breach of a multi-year advertising agreement with a mobile security firm. The court awarded our client $1.7 million, plus interest and late fees, as well as attorneys’ fees and costs.
Ireland-based Technology Company – Advisory Firm’s Breach of Contract Claims Dismissed
Secured the dismissal of all claims against an Ireland-based software company and its US subsidiary filed in New York state court by an advisory firm alleging our client had breached the terms of a service agreement in which the plaintiff was to either find a buyer for the company or find entities willing to provide financing. Asserting breach of contract, fraudulent inducement and unjust enrichment, among other causes of action, the plaintiff further alleged that the agreement was breached just prior to a transaction which would have entitled the plaintiff to a significant fee. In its order, the court agreed that the plaintiff had failed to establish jurisdiction over the Ireland-based parent and that the U.S.-based entity was never a party to the agreement at issue.
Appellate Court Victory Barring Arbitrator from Modifying Original Award
Herrick secured an important victory before the Appellate Division, Second Department, obtaining a ruling affirming the trial court’s decision to overturn a Bet Din arbitration in which the arbitrator issued an additional award against our client after having already rendered a final award. The plaintiff had argued that the arbitrator’s first award of $425,000 was only an interim judgment and that the agreement vested the arbitrator with continuing authority to issue another award against our client, two years later and involving the same general subject matter, for an additional $3.75 million. Although courts rarely overturn arbitration awards, the appellate court agreed that the arbitrator lacked the authority to expand the previous award and affirmed the decision on the grounds that the arbitrator was "Functus Officio."
Multinational Food & Beverage Company – Successful Defense in New Jersey Franchise Practices Litigation
Successfully defended the U.S. affiliate of a multinational food & beverage company sued in New Jersey federal court by a distributor alleging violation of the state's Franchise Practices Act. In both the district court and on appeal to the Third Circuit, Herrick delivered key victories in opposing the plaintiff's efforts to secure an injunction preventing our client from effecting its contractual right not to renew an exclusive distribution agreement between the parties. In the district court, we obtained rulings partially dismissing the complaint, denying plaintiff's motion for a preliminary injunction, and denying plaintiff's motion for an injunction pending its appeal to the U.S. Court of Appeals for the Third Circuit. Following expedited briefing, the appellate court found in our client's favor, affirming the district court's rulings. In light of these developments, the parties ultimately reached a settlement and stipulated to the dismissal of this litigation.
Counsel and Law Firm – Successful Appeal of Contempt of Court Ruling
Secured a favorable ruling from the Second Circuit on behalf of attorneys and their law firm in their appeal of a district court’s ruling holding them in contempt of court and sanctioning them for the alleged failure of their clients, the Republic of Iraq and Iraq's Ministry of Industry, to comply with a post-judgment discovery order. Finding that our clients had been given insufficient notice of the charges, and that the district court exceeded the bounds of its discretion when, under the circumstances, it proceeded to sua sponte find the attorney appellants in contempt, the Second Circuit vacated the order of contempt against our clients. In vacating the contempt finding, the Second Circuit also ruled that the attorneys had appellate jurisdiction even after the underlying case against their clients had settled and the judgment satisfied, a previously open question of law in this Circuit.
Major League Baseball Franchise – Contract Dispute
Obtained summary judgment, including dismissal of all claims and recovery on counterclaim for breach of contract, on the district court level on behalf a Major League Baseball franchise in a contract dispute involving advertising and sponsorship rights, and protected judgment on appeal to the Second Circuit.
Ukrainian Technology Services Company – Breached Master Service Agreement
Herrick secured an extremely favorable settlement on behalf of a Ukraine-based technology service provider, resolving its claims against a US-based multinational financial services company in connection with more than $6 million in software development services rendered by our client. Significantly, this settlement was accomplished without engaging in potentially extensive and costly litigation.
Multiple Claims Dismissed in Shareholder Derivative Litigation
Secured a ruling in Kings County Supreme Court on behalf of a garment manufacturer and certain affiliated individuals and entities that dismissed several causes of action in a purported shareholder derivative suit. Among the claims asserted was the allegation that a competing entity had been used by certain defendants to usurp business opportunities, and that ownership of a company facility had been fraudulently transferred to a charitable trust and foundation. The court granted our motion to dismiss the claim for a constructive trust over either the alleged competing entity or the foundation; an unjust enrichment claim against the charitable trust and foundation defendants; and a claim of rescission of the alleged fraudulent transfer of the facility, which the court found was time-barred.