An L.A. Superior Court judge has sanctioned prominent Santa Monica developer Neil Shekhter of NMS Properties over his actions stemming from a 2010 deal forming a joint real estate venture to finance and develop nine multifamily residential properties, mostly on the Westside.
As part of the deal, Shekhter was to provide development expertise to Boston’s AEW Capital Management, which would provide some $60 million in upfront capital.
However, a Nov. 22 ruling detailed the stunning collapse of the transaction, which includes findings of forgery, evidence destruction, and perjury.
Los Angeles Superior Court Judge Suzanne Bruguera dismissed Shekhter’s lawsuit and ordered the developer and his company to pay attorneys’ fees and costs for the defendant, Boston-based AEW.
“Plaintiffs fabricated evidence, submitted perjury about the same, and destroyed evidence, while simultaneously representing to the Court that they were proffering authentic documents and that they had preserved evidence,” Bruguera’s order reads.
Shekhter initially filed the case in 2014 claiming AEW owed him $720 million for violating the terms of a joint venture agreement.
The case, for all its drama, is essentially a contract dispute over the terms of the deal. Shekhter claims that the terms allowed him to buy out AEW after three years – something he attempted to do in 2013 – while AEW claims there was a five-year term. After extensive forensic investigation and testimony, the judge ruled that a document submitted by Shekhter to prove his claim was not authentic.
During the investigation, Shekhter also switched out his personal computer’s hard drive, violating a court order, something his attorney, Louis “Skip” Miller of Century City’s Miller Barondess, said his client admitted was a mistake.
Miller added that he vehemently disagreed with the sanctions and Bruguera’s decision to dismiss the case.
“The ruling is wrong as a matter of law and will be overturned on appeal,” Miller said.
AEW’s attorney, James Fogelman of Gibson Dunn & Crutcher in Century City, said he and his colleagues were pleased with the judge’s order.
“We are grateful that the Court gave this matter the attention it deserved and came to the right result under these extraordinary circumstances,” Fogelman said in a statement.
Hulu’s acquisition of Structured Data Intelligence and its Video Genome Project metadata aggregation operation on Nov. 15 represented a rare Santa Monica trifecta in the local deal-making world.
Both companies are headquartered in Santa Monica, as is Structured Data Intelligence’s backer, Segel Group Ltd., the family office of investor David Segel.
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