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Last September a Superior Court Judge in Morristown, New Jersey awarded US$84.5 million in damages to two former business partners of Zygmunt “Zygi” Wilf, and of his brother Mark and their cousin Leonard. Including legal costs on top, the award against them exceeded US$100 million.
The Wilfs were ordered by Judge Deann Wilson to pay the money to Ada Reichmann of Toronto, who is married to Ralph Reichmann a member of the prominent Reichmann real estate development family there, and to her brother Joseph Halpern of Brooklyn.
The suit arose out of a partnership to develop Rachel Gardens a large 764 unit apartment complex in Montville New Jersey in the late nineteen eighties. Ada and her brother Joesph first filed suit against the Wilfs in 1992. They claimed then they the Wilf family systematically cheated them out of their fair share of revenues from the complex once it was finished. They further alleged the Wilfs were running what they claimed amounted to “organized-crime-type activities” in their bookkeeping practices – practices which gave the Wilfs a disproportionate share of the income form the apartments.
After many twists and turns in the New Jersey court system over the intervening years, fiercely litigated by the Wilfs and costing both sides millions in legal costs, in September of last year Judge Wilson agreed with them, hence the enormous damage award. In January 2014, the Wilfs then formally appealed her judgment of the case and an order she had also given last September to reveal their net worth to the public. As part of the January appeal the Wilfs had to post a US$110 million bond to cover the judgment against them, in the mean time – and such bonds are not particularly cheap to arrange.
Revealing their net worth, however, really stuck in the Wilfs’ craw, particularly as Zygi Wilf is also an out of state partner in the Minnesota Vikings football team. He and his partners, there have successfully been bidding for Minnesota state aid to build a new stadium for the club. Whichever way the publication of the Wilfs’ net worth might go could have been adverse publicity for them – too high and why the need for state aid critics might ask? Too low and then, on the contrary, maybe the new stadium is less of a good idea in the first place if its partners should be less able to support it, particularly after a US$100 million judgment against them.
Well, now the New Jersey Court of Appeals has just ruled that at least for now the Wilfs do not have to publish their net worth, which is a victory of sorts for the Wilfs. On the other hand, on the substance of the case the Appeals Court ruled that the single purpose partnership between the Wilfs and Ada Reichmann and Joseph Halpern, that developed the apartments all of those years ago, before it all became fractious, must now be dissolved.
What that means in practice is that the apartment complex will now have to be immediately sold as part of the dissolution, and the funds presumably lodged with the court to replace the earlier bond posted for the appeal. The appeal itself could still take two, or even three, years to be finally disposed.
Nevertheless, this would be a very concrete step towards resolution as now it would become only about money; the potential future values of the bricks and mortar involved will no longer be something to fantasize about. Even so, the Wilfs have now already asked the state Supreme Court to stay the dissolution of the partnership.
This has been a long-lasting war of attrition between two rather well-heeled families; one, moreover, that it looks like isn’t over yet either. Indeed, it seems to make a statement about the poor quality of justice in the otherwise splendid state of New Jersey that anything can take so long to bring to a final conclusion in what passes for a justice system – it is now over 21 years since the case first started in 1992.