Sept. 24: Wilfs fined $84.5 million in NJ real estate fraud case

– A New Jersey judge has awarded Minnesota Vikings owners Gigi and Mark Wilf and their cousin Leonard Wilf $84.5 million in damages to former business partners accused of fraud over a 1980s real estate deal. ordered to pay reparations.

The judgment covers compensatory and punitive damages to plaintiffs Josef Halpern and Ada Reichmann.

Damages awarded on Monday did not include plaintiffs’ claims of more than $16 million in legal and accounting costs, so the damages awarded could exceed $100 million.

High Court Judge Deanne Wilson said in a judgment issued last month that Wilfs committed fraud, breach of contract, breach of fiduciary duty, and also violated the state’s civil procedure code in a partnership involving a 764-unit apartment. , ruled on Monday.Complex in Montville, New Jersey

Wilf’s attorney, Peter Harvey, said the Wilf family, who did not attend the hearing, were informed of the judge’s decision. He declined to disclose their reaction, citing attorney-client privilege.

The Wilf family has 45 days to appeal, which could delay the award of damages and referral of the case to a state attorney general or county attorney for possible criminal investigation, making the verdict final. Not a thing.

Halpern declined to comment after the hearing. Reichmann, the sister and wife of a prominent Canadian developer, was not present.

Halpern’s attorney, Alan Lebensfeld, said, “What Wilf did in this case was abhorrent,” adding, “They were sophisticated businessmen and took advantage of my clients.” .

The lawsuit is being filed against the National Football League, Minnesota Gov. has been watched by Minneapolis.

Wilfs hopes to open a stadium in downtown Minneapolis in time for the start of the 2016 football season. Construction is scheduled to begin in early November.

The agency’s board of directors is expected to vote on the stadium’s use and development agreement at its meeting on Friday.

An independent audit conducted for officials and completed earlier this month found that Wilfs has enough money to cover nearly $477 million in stadium financing, regardless of the ruling. Their contributions include a $200 million NFL loan and proceeds from stadium naming rights, sponsorships and licensing fees.

Harvey said Wilson’s order was simply, an order, and had nothing to do with the ability of the Wilfs or the Vikings to fund their portion of the new downtown stadium.

“The good news here is that, apart from the fact that we believe this decision cannot be appealed, what the judge has decided will not affect the construction of the stadium,” Harvey said.

Harvey estimated that the appeals process would “easily take two to three years,” adding that “the stadium will be built and the opening kickoff will take place long before this case is decided.”

Dayton expressed concern that the New Jersey lawsuit and ensuing civil penalties could impede Wilfs’ ability to pay for the stadium.

Dayton said the owners had donated a “substantial portion” of their stake to the project, days after a review revealed Wilfs had the financial means to pay for the stadium’s share. and asked the authorities to ensure that exorbitant fees are not passed on. to season ticket holders in the form of a “Personal Seat License” fee.

Seat licenses, which typically sell for an average of thousands of dollars, are paid by fans on top of the cost of a season ticket and are often used by NFL teams to help pay for new stadium construction.

R-Lindstrom Rep. Bob Barrett, a long-time critic of the stadium’s financing deal, referred to those charges Monday in reaction to the ruling from New Jersey.He said Wilfs is in a position to generate a significant amount of revenue from stadium licensing fees, stadium naming rights and other sponsorships, and that “it is very likely that Wilfs will actually make a profit” from building the stadium. said

Barrett said the project’s “lasting legacy” was that Minnesotans paid for the stadium and that Wilfs “gave from their ‘contributions’ to pay an $84 million judgment in New Jersey.” We cannot make the proceeds available for use.”

Meanwhile, Vikings spokesman Lester Bagley said on Monday that negotiations on the lease and development agreement were “going very well,” adding that the team and officials were “working hard to get the project off the ground.” ‘ said.

Also on Monday, Minnesota advanced plans to issue bonds that will be used to cover the project’s $498 million public cost.

NFL Commissioner Roger Goodell has assured that the team will honor its commitment to build and play stadiums in Minnesota, regardless of the outcome of the Wilf incident, which caused major drama in New Jersey.

Net worth next

Halpern and Reichmann demanded over $50 million from Wilfs. Wilfs used fraudulent bookkeeping practices to defraud him of a share of the proceeds from Rachel Gardens, a 764-unit apartment complex in New Jersey, they said.

Reichmann filed her first lawsuit in 1992 after Wilfs removed her as a partner, claiming she was no longer contributing to development costs.Halpern joined the lawsuit in 2009.

Wilson ruled last month that Reichmann and Halpern are entitled to a 25% share of the proceeds from Rachel Gardens. never received.

The judge ruled that Zygi Wilf was obliged to pay 60% of the punitive damages, or approximately $21 million, while Mark and Leonard Wilf were each liable for 20%, or approximately $7.3 million each. She did not decide how the compensatory damages payment would be divided.

“They were sufficiently and justly punished by the judge,” said Lebensfeld.

As part of the lawsuit, Wilson also ruled that Zygi and Mark Wilf must disclose personal assets. She won’t unwrap the number until Wilf gets a chance to challenge her decision.

In court documents filed this month, Zygi Wilf said disclosing his net worth would pose a threat to his family and could harm his business dealings. We have stakes in 460 companies in 37 states.

Staff writer Richard Merihew contributed to this report.

Corey Mitchell is a correspondent for the Star Tribune Washington Bureau. Twitter: @C_C_Mitchell

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