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.
Former Employee – Antitrust and RICO Violations Claims Against Media Company
Representing a former employee of a privately held financial, software, data and media company in an action alleging antitrust and RICO violations stemming from a purported bid-rigging scheme.
Madoff Investors – Recovery of Damages
Representing investors in Bernard L. Madoff Investment Securities, LLC, seeking to recover damages resulting from the largest Ponzi scheme in U.S. history.
Private Equity Firm – 1934 Act Violations
Representing a private equity firm, its affiliate and certain executives in an action alleging violations of the 1934 Act and Delaware securities law, and claims for common law fraud, negligent misrepresentation, breach of fiduciary duty, breach of contract, and retaliation.
Lender –Recovery of Demand Promissory Notes
Representing lender in several actions to recover under various demand promissory notes.
Former CEO of International Microelectronics Company – Securities Class Action
Representing the former CEO of an international, public microelectronics company headquartered in Taiwan in connection with a class action, brought against the company and certain of its current and former senior officials, seeking remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
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.
Foreign Bank – Alien Tort Statute Litigation
Represented a foreign bank in connection with an action brought in the U.S. District Court for the District of Columbia by foreign plaintiffs against the bank and other defendants alleging claims under the Alien Tort Statute (“ATS”) for, among other things, crimes against humanity and aiding and abetting such crimes allegedly perpetrated in disputed areas in Israel. Achieved voluntary dismissal of all claims against our client.
Auction House and Modern Pawn Brokers – Ownership Dispute
Representing Auction House and Modern Pawn Brokers in actions brought in New York Supreme Court against and by defendant who pawned a multimillion dollar sapphire that had been stolen decades before. All claims against our clients were dismissed while defendant’s attempt to dismiss our client’s claims against him have been denied.
Investment Holding Company – Breach of Covenant not to Sue
Acting as special counsel to RCAP Holdings, Inc., an investment holding company, seeking damages for the breach of a covenant not to sue contained in a prior settlement agreement.
Insurance Brokerage and Consulting Companies – Breach of Non-Solicitation and Non-Compete
Represented company in connection with several actions involving the breach of non-solicitation and non-compete agreements.
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.
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.
Real Estate Developers – Summary Judgment in Litigation over Recourse Provision in Mezzanine Loan Guaranty
Defense of the guarantors of a multimillion dollar mezzanine loan secured for the development of several Florida condominium projects in an action filed by the lender in New York federal court. Seeking the full outstanding balance of the loan with interest, an amount totaling nearly $190 million, the lender claimed that certain transfers out of an escrow account holding condominium purchasers’ deposits triggered a full recourse provision in the guaranty. Herrick successfully argued that the full recourse provision of the guaranty was never triggered, obtaining a ruling granting our motion for summary judgment and dismissing all claims against our clients.
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.
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.
All Claims Voluntarily Dismissed Following Award of Sanctions in Real Estate Dispute
Successful defense of an LLC in litigation over the breach of an alleged joint venture agreement which plaintiffs claimed entitled them to an ownership interest in a valuable Manhattan property. Herrick obtained an order canceling plaintiffs’ notice of pendency on the property, and successfully argued for sanctions based on frivolous litigation conduct. In addition to negotiating a substantial monetary settlement for attorneys’ fees and for costs associated with delays in refinancing a $32 million mortgage on the property, Herrick secured the voluntary dismissal of our client from the action and the plaintiffs’ unconditional and irrevocable release of any and all claims to ownership of the property.
Multinational Cosmetics Company – Favorable Resolution to Breach of Contract Action
Represented a multinational cosmetics company in litigation filed in New York federal court by a Washington, DC area retailer asserting breach of contract, detrimental reliance, and tortious interference claims, which sought monetary damages and a preliminary injunction preventing our client from violating a retailer agreement that allegedly required it to supply cosmetic products to the plaintiff. After obtaining an order denying the plaintiff’s motion for a preliminary injunction, Herrick negotiated a settlement on favorable terms that resolved the litigation.
All Claims Dismissed in Litigation Challenging $9 Million Sale of Brooklyn Apartment Building
Secured a ruling dismissing all claims against the insured buyers of a Brooklyn apartment building in litigation seeking to strip them of their interests in the property. The plaintiff launched a multi-pronged attack on the $9 million sale of the building, claiming the transaction had violated his right of first refusal, that the individual who had signed the deed transferring title to the property lacked capacity, and that the deed itself was a forgery. In its ruling, a New York state court granted our motion to dismiss in its entirety and cancelled the notice of pendency.
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, defeated the plaintiff's multiple post-trial motions, and successfully defended those decisions before the New York State Appellate Division, Second Department which unanimously affirmed.
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.
Appellate Division Reverses Civil Penalty against Landlord over ADA Accommodations
Herrick achieved a significant appellate victory on behalf of a national real estate development and management firm, securing a ruling from the Appellate Division, Second Department that reversed a New York City Commission on Human Rights order requiring the client to pay a $185,000 fine for denying a tenant's request to construct a handicapped-accessible entrance to her Queens apartment. In its ruling, the court wrote that the record lacked "substantial evidence" to contradict our client’s claim that installing an accessible entrance was not structurally feasible. The decision was the culmination of a nearly 6-year-long dispute in which we initially prevailed on the client’s behalf before an administrative law judge who held that the proposed accommodation sought by the tenant was not reasonable. The Commission, however, summarily rejected the ruling, and awarded $200,000 in damages and penalties. A Queens Supreme Court affirmed the agency’s decision but reduced the award of damages. On appeal, and after oral argument, the Second Department reversed the trial court’s decision, holding that the Commission’s determination of unlawful discrimination and award of damages should have been annulled in its entirety.
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.