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NMS’s Fraud Claims Against AEW Capital and its Executives Eric Samek

18.11.2018 - 01:17

LOS ANGELES, CA / ACCESSWIRE / November 17, 2018 / The decision in the Shekhter v. Wong case by Judge Gerald Rosenberg allows for a change in management of these properties. It does not affect, in any way, the very serious claims for fraud and rescission, and for recovery of compensatory and punitive damages, that our clients are pursuing against AEW and its executives Eric Samek and Marc Davidson as well as the so-called new buyer of these properties.

Ownership of five of the nine properties is still unsettled and will depend on the outcome of our fraud claim, which likely will go to trial next year. Earlier this year, the California Court of Appeal reversed the prior dismissal of the Lincoln Studios case on demurrer and held that Neil Shekhter and NMS's fraud claims against AEW can proceed in the trial court. Specifically, the Court of Appeal upheld as sufficient our claim that "during negotiations, AEW knowing [sic] made false representations about the joint venture program, including that there was a monetization right and that [plaintiff Neil] Shekhter's transfer of his properties to the joint venture at below fair market value would be 'of no moment' because of his right to 'take-out' AEW within a few years."

In line with the Court of Appeal decision, Shekhter/NMS filed an amended complaint against AEW and its executives Eric Samek and Marc Davidson for fraud based on AEW inducing Shekhter to transfer five properties—that he owned—to the joint venture, at below market value, based on AEW's promise that he could monetize his interest in the joint venture by way of buying back these properties. Shekhter also contributed over $10 million into these properties and developed them without charging a developer's fee. There is powerful "smoking gun" evidence supporting the fraud claim including emails and a sworn declaration by a former AEW executive who confirmed that AEW had no intention of honoring the deal despite its promises to Shekhter.

Shekhter also intends to amend the complaint in the Shekhter v. Wong case to add claims for conversion against AEW on the basis that the hedge fund absconded with the proceeds of the "sale" of the properties to the new buyers and has not made any distributions from the $430 million sale to Shekhter, an owner and partner in the joint venture.

According to Skip Miller, a partner at Miller Barondess, LLP in Los Angeles and lead counsel for Shekhter: "We have the evidence to prove that AEW defrauded our client by making promises that it never intended to keep and didn't keep. We look forward to our day in court."

Contact:

For more information, please contact:

Skip Miller

Partner

Miller Barondess, LLP

Los Angeles

(310) 552-5251

smiller@millerbarondess.com

SOURCE: NMS Properties, Inc.

(PR-Inside.com)

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