Roig Partners Obtained Favorable Result in Complex Commercial/Real Estate Dispute
Nelson C. Bellido and Francis X. Sexton, Jr. as attorneys, assisted by paralegals Rosy Benitez and Jeanette Lorenzo, obtained a highly favorable result for one of our clients who happen to be the largest insurance companies in the world involving a complex commercial/real estate joint venture dispute
The client and its joint venture partner (and later its adversary in a case filed in Miami’s Complex Business Division), a prominent New York real estate developer, formed a joint venture which purchased for $31 million a retail building on Lincoln Rd., Miami Beach. Of that purchase price, the client had contributed over $29 million. The Joint Venture Agreement was over 90 pages long and contained complex “waterfall” (i.e., cash distribution returns on investment) provisions and methodologies for terminating the joint venture wherein one party or the other could take title to the property, buying out the other joint venture partner.
When the developer joint venture partner’s efforts to lease the building failed, our client (pursuant to the JV agreement) timely and properly submitted to the developer, a proposal that the building be sold. Instead of responding to the offer, the developer joint venture partner sued our client for damages. The amount sought initially was $30 million, and with an alleged loss of profits increased to approximately $45 million. In the initial mediation, the plaintiff developer joint venture partner demanded $20 million from our client to settle the matter. Our client refused that offer and counterclaimed for specific performance, i.e., to force the developer joint venture partner to purchase the building for in excess of $40 million.
Subsequent to the first mediation, in lengthy depositions of the principals for the developer joint venture partner, our team forced those principals to concede (a) that the manner in which our client had terminated the joint venture had been totally proper pursuant to the joint venture agreement; and (b) that in the event the joint venture was terminated as the client had done, then due to the wording of the “waterfall provisions”, the developer joint venture partner would recover none of its investment, but our client, all of its investment.
Armed with that discovery, our team crafted a motion for summary judgment against the plaintiff developer joint venture partner for immediate, specific performance (i.e., to buy the building for in excess of $40 million). The next day, adversary counsel requested an immediate mediation.
In that, the second mediation, held 10 days after the filing of the client’s summary judgment motion, the developer joint venture partner dropped its demand for any damages and agreed, within 60 days of the mediated agreement, to do one of two things: pay our client $35 million in cash or to convey to the client 100% of the title in the building, now worth between $35 million and $40 million. In May, our client obtained complete title to the building and is now leasing it with the goal of selling it at a substantial profit over its investment. It recovered its initial investment of roughly $29 million, plus another $6 million. The client was very grateful for the hard work and successful results achieved by the Roig Lawyers team. In the client’s words, “Rockstar work by your firm throughout.”