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SANTA MONICA, Calif., Feb. 08, 2019 (GLOBE NEWSWIRE) -- Yesterday, the Court granted Neil Shekhter and his affiliated companies’ motion to file an amended complaint in the Shekhter v. Wong litigation pending in the Santa Monica Superior Court over the 2016 sale of properties in Santa Monica and West Los Angeles belonging to Shekhter.
The amended complaint is based on new allegations of fraud and conspiracy by AEW Capital Management and its executives Eric Samek and Marc Davidson as well as the buyers of the properties, a group led by Bay Area developers, Dennis Wong and Mark L. Friedman. Shekhter is seeking to have the Court rescind the 2016 sale of the properties to the Wong/Friedman parties, who as the complaint alleges, “were not bona fide purchasers.”
According to the complaint, AEW refused to accept a $500 million offer to purchase the properties from a legitimate third party buyer only to turn around and sell it to the Wong/Friedman parties in an insider, below-market transaction done vis-à-vis a private auction. The properties were sold for $430 million—$70 million less than the prior $500 million offer, and approximately $100 million below market value based on sale of comparable properties. This was done as part of a conspiracy between AEW and the Wong/Friedman defendants to confiscate Shekhter’s equity in the AEW-NMS joint venture.
To this day, Shekhter has not received a penny from the proceeds of the sale. In fact, as the complaint alleges “AEW instructed, and the [Wong/Friedman parties] permitted, the escrow company that handled the sale to distribute the proceeds solely to AEW.”
According to the complaint, there were even more irregularities with the sale: AEW took back $236.8 million in seller financing at substantially under-market interest rates; closed the sale without title insurance; did not list the properties in the market to get the highest value; kept the identity of the buyer secret and withheld all sale records from its joint venture partner, Shekhter; and agreed to indemnify the Wong/Friedman defendants so there was no risk for them to conspire with AEW Capital Management.
According to Skip Miller, partner at Miller Barondess, LLP in Los Angeles and lead counsel for Shekhter: “We have evidence to support a conspiracy between AEW and the buyers to confiscate our client’s equity in the joint venture. We look forward to our day in court.”
For more information, please contact:
Miller Barondess, LLP
A PDF accompanying this announcement is available at http://resource.globenewswire.com/Resource/Download/98f420b2-75b5-4913-8955-7b498f519633