Brothers Jack and Eddie Sitt of the family-run real estate investment firm Sitt Asset Management will receive equal payments from deals made at 2 Herald Square, a judge ordered last month in New York State Supreme Court.
“Every member gets the same penny,” Judge Eileen Bransten said in ruling in favor of Jack and Eddie Sitt.
The October ruling prevents Jack’s brother Ralph Sitt from taking control of the 365,000-square-foot commercial property, which is valued in excess of $500 million. The Real Deal reported yesterday that co-working giant WeWork is set to sign a lease for 122,000 square feet at 2 Herald Square.
Jack, who has since left Sitt Asset Management and launched his own short-term rental business, sued his brother Ralph, alleging that his sibling devised a scheme to squeeze him out of the profit shares and decision making at the Herald Square property. In court documents, Jack claimed that Ralph forged an operating agreement that made him the sole member of an entity controlling the property.
“The Court also sent a clear message to Ralph, ordering him to produce documents that have long been withheld, as well as directing him to honor Jack’s equal participation rights… in distributions made by Sitt Asset Management,” Jack’s lawyer, Howard Cotton of Katten Muchin Rosenman LLP, said in a statement to The Real Deal.
In a statement to TRD, Ralph’s attorney Stephen Meister argued that Jack was never a managing member of the the entity that had controlled 2 Herald Square. Meister said that in a separate lawsuit filed by Eddie, a judge denied an emergency motion declaring that the operating agreement was forged and that he should be installed as a co-manager.
“This is simply an effort to extort an undeserved settlement. Ralph has been managing 2 Herald and signing all the leases with no involvement by Eddie or Jack since they bought the building 8-9 years ago,” Meister told TRD.
Ralph and David have not filed an appeal to the judge’s decision on the motion and the case is still ongoing.
Aside from talks to lease nearly a third of the building’s space to WeWork, Ralph has also engaged in negotiations to potentially sell the building, according to court documents.