Published On: Tue, Apr 2nd, 2013

Feldman Family from England Sue their Israeli Lawyers for about $10 million

/ By Itzhak Dannon /

Attorney Elhanan Winitsky of Petach Tikva in Israel and his son Elazar Mordechai, were sued by Heinrich Feldman and his son Yehuda, of England, who is seeking NIS35 million (about $9.5 million) in compensation for an alleged “malicious conduct, or at least negligent and outrageous, ” in relation to real estate transactions the defendants handled for plaintiffs which, according to the suit, wrought a financial loss of approximately NIS100 million (about $36.5 million).

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According to the complaint, starting in 2005 Heinrich Feldman began to invest in real estate transactions in Israel.  He did this through Wade Properties, a company he owns, and through certain foreign companies belonging to a trust (the Mazal Brocha Trust) managed by Bank Leumi Overseas Trust Corporation of the island of Jersey, whose beneficiaries are the descendants of Heinrich Feldman.

 

According to plaintiffs, the defendants prompted them to systematically engage in transactions with no economic justification.  These transactions allegedly executed by defendants in a reckless and outrageous manner, combined with active misrepresentations prior to each purchase. Defendants, it is averred, failed to insure registration of the real estate in plaintiffs’ names, following each purchase, and in a significant number of these cases, failed the registration could not be completed since large additional payments had to be paid, due to known debts and the need to chase after the sellers to discharge their debts appurtenant the land.

 

Among other claims, the complaint alleges that the defendants have caused plaintiffs to purchase certain real property in  Tel Aviv for NIS72 million (about $20 million) – property that a professional appraisal had valued at NIS37 million (just over $10 million) or, approximately, half the price allegedly paid by plaintiffs.

 

Another twist in the plot is delineated in the allegations regarding a purchase of real estate property in Zichron Ya’akov, where the attorneys represented that the market value of the acquisition at $10 million, but since the seller was in distress it was available for the basement bargain price of a mere $8 million.  In reality, plaintiffs claim, their legal representatives were aware of the fact that the seller had just purchased the land for a mere $5.5 million.

 

To add insult to injury, the plaintiffs state that their legal counsel had failed to insure that the seller would pay the full consideration (when she had purchased the property prior to its re-conveyed to plaintiffs) and the one who sold it now alleges that both subsequent deals are void due to such failure of consideration.  Accordingly, the investment is liable to go down the drain, altogether.

 

There is also an alleged misrepresentation regarding a lot in Jerusalem, an event in which the attorneys caused plaintiffs to buy land that purportedly could be improved with a 20 story building.  In fact, the complaint states, they had a professional opinion stating that, at most, a structure of 6-8 stories may be built there.

 

For a period of four years plaintiffs maintain they had complete and unwavering trust in defendants, who also managed their affairs in Israel.  However, these counselors at law, claim the plaintiffs, have cynically and shamefully exploited the trust vested in them and conducted the Feldmans’ business in clear and egregious violation of their duty of loyalty to their clients while knowingly misleading them, and in conflict of interests, deliberately acting in contravention of their clients’ interests, which allegedly constitutes, at the very least, professional negligence that is, in fact, criminal.

 

According to plaintiffs the defendants prompted them to systematically engage in transactions with no economic justification, while executing the same, in their managerial role, in a reckless and outrageous manner, which execution was combined with active misrepresentations prior to each purchase and without insuring registration of the real estate in plaintiffs’ names, following each purchase, and in a significant number of these cases, failing to complete the registration, since vast additional payments had to be paid, due to known debts and the need to chase after the sellers to discharge their debts appurtenant the land.

 

Plaintiffs’ pleadings state that in March 2010 the Winitsky law firm submitted an unfounded, greatly exaggerated and over-inflated bill for attorney fees of more than NIS 28 million (over $7.5 million) – despite the fact that all their billings till then were paid in full.

 

Plaintiffs estimate their damages to exceed NIS100 million (about $36.5 million), however, solely for reasons having to do with the filing fees (and due to their belief that they would not be able to recover a higher amount) have set their claim at the sum of NIS 35million (about $9.5 million).

 

 

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