The Real Deal New York

Town brawl: Heiberger gets restraining order against Sitt

Both men claim victory after ruling handed down; outside attorney sees no winner

February 28, 2014 03:00PM
By Katherine Clarke

From left: Joe Sitt and Andrew Heiberger

From left: Joe Sitt and Andrew Heiberger

MOST READ: Town Residential founder Andrew Heiberger has been awarded a temporary restraining order against the company’s partner, Thor Equities’ Joseph Sitt, preventing Sitt from continuing to shut Heiberger out of his office at the firm’s Irving Place headquarters.

The restraining order is just the latest development in an ongoing saga between the company’s top guns, which began in late January when Sitt refused to renew Heiberger’s contract as CEO, citing Heiberger’s alleged failure to meet financial targets.

According to the order, Sitt will be prevented from selling the company or Heiberger’s interest in the company until a judge hears the case in a month’s time. Sitt’s ability to appoint new managers to the company — and thus control its board — was not rescinded by the order, however. In addition, Heiberger’s termination as CEO still stands.

Attorneys told The Real Deal that the order was simply an interim measure that would prevent Sitt from excluding Heiberger from the company’s board of managers or company offices, and from continuing the alleged seizure of his emails, until a request for a preliminary injunction can be heard by a judge on April 8.

“This very intelligent order will likely cause the parties to resolve this very quickly,” said attorney Terry Oved, who is not involved in the case. “They both are going nowhere with this. If the goal of this was to expedite one party winning or another, it didn’t do it. Heiberger tried to bring a death blow, which didn’t really hit.”

Heiberger and Sitt interpreted the order very differently in statements provided to The Real Deal.

Heiberger called the judge’s order a victory for both him and for the company, while a spokesperson for Sitt intimated that the Thor honcho had won this round.

“I’m happy to get back to work after this nightmare,” Heiberger said. “It’s really been a very trying and uncertain time. I’m just grateful to be in the position to do my part get us back on track.”

“I’m hopeful that Joe and I can begin to repair our partnership and get the firm back on track,” he continued. “We have a lot of work to do internally to ensure our representatives can do even better than before.”

Sitt’s spokesperson said: “With our control of Town affirmed by [the court], we remain focused on moving past these issues with Mr. Heiberger and working shoulder to shoulder with Town’s superb brokers and staff to further build on their outstanding record of success.”

Meanwhile, in an email sent today, Michael Schurer, Thor’s CFO, tried to reassure agents and managers that Town’s financials were on solid ground and all financial commitments to them would be honored.

“I can assure you that the company remains financially sound, that it has a ready and sufficient source of new capital to ensure all of its obligations and commitments can be met without concern, and that our collective agenda to continue the company’s strategic growth will not be interrupted. Recent events have only served to bolster our resolve to ensure Town’s outstanding service….I know it’s a big ask, but please know we are counting on each one of you to join us in this resolve.”

In his email, Schurer also addressed the “opportunistic” behavior of competing firms, who have allegedly been looking to poach top agents from the company amid the ongoing litigation.

“These recruiting efforts say more about those who engage in predatory recruiting methods than they do about Town,” he said.

  • Jo Blo

    Ha!

  • The Pot Calls the Kettle Black

    So let me get this straight, these guys are now whining about predatory poaching? Didn’t they proudly announce their plan was to build the entire company by way of poaching? And didn’t they do so by cold calling every firm on the notion they were some superior brokerage model, well funded and successful? Now the public revelation that they are losing millions and they want these firms they so arrogantly poached from to sit on the sidelines and do nothing? Besides, who would stay at a firm that is losing so much money? With a public embarrassment of a lawsuit like this? There are plenty of good choices in the industry and agents are independent contractors. Who wants to go on a pitch with this lawsuit now becoming the company’s brand, the embarrassment of the industry. Historically, at firms with cash flow problems, agents become afraid that they won’t get paid their due commissions and exit to other more stable firms to avoid the headache. There is no need for poaching. What a bunch of sore losers

    • Char4Dew

      You got it right :)
      Good brokers should run for the hills and fast.
      But when it is settled they will become the 90% commission firm too LOL just to get them back.
      The game in the industry has changed a lot. REBNY used to hold court to keep the pay field clean…NO MORE!!!!

  • http://www.batman.com BobthePlunger

    Heiberger can do some damage. Sitt is done

    • Bobwho?

      Heiberger is allowed to go to his office that is about it, he is out as CEO, Sitt controls the board, , controls the bank accounts , can hire and fire and has the deeper pockets. Sitt is holding the cards in this Sitt-uation

      • Char4Dew

        But Andrew knows more about running a Brokerage firm.
        I think ?

        • “Deja Vous”

          Anybody want to buy TOWN? Corcoran.

          • Guest

            I think that is exactly why Andrew went into this venture; he did not need Sitt money to do this at all if he had long term goals. Let’s see if NRT is buying?
            I think the brokers/agents need to go where its solid grounds, because the sellers will go to the better firms in this market.
            9 out of 10 smaller firms out there are not playing clean anyway.

          • Guest

            Why would NRT pay $1 for Town? Or anyone else pay for Town? It has no value. Head of New Dev did not believe in it enough to stay, followed by the Director of Operations who Andrew made into someone worth hiring. If two members of the original corporate staff jumped ship long before all this bad press, why would anyone think that now is a good time to buy or invest in Town?

    • Char4Dew

      They are both done. Sit is not going to sit still and let the fat boy roll over him.

  • DTNYC

    So, their financials are solid BUT they have a new source for additional capital???? Sounds like their finances are crap and they need more money just to stay afloat. Maybe 10 offices in 3 years wasn’t such a great idea.

  • Apollo Creed

    You may want to read that again…sufficient source of new capital…not new source.

    • DTNYC

      I read that to mean they NEED the money and have a new source to get it from. It doesn’t look good. Perhaps I’m wrong. It this lawsuit weren’t going on I would likely be the optimist. But it is so I think they NEED the money.

      • Char4Dew

        Neither of them really play nice on any level so this is just about right.

      • Char4Dew

        Neither of them really play nice on any level so this is just about right.

        What happens when this fight is over? they wont want to work together anyway, and if they do they will not play clean and end up in another fight.
        I see dooms day on this partnership.

  • “Frozen Assets”

    The courts could freeze all of TOWN’s assets until the power dispute is resolved right? That could be a problem for both of them.

  • Sticks&Bricks101

    The real question is … Where is Wendy ?

    • Town Residential

      being a Sitt Stirrer

    • Char4Dew

      My question is what happened to this industry? used to be a respectable industry every article is about thieves, A PITT I say….

    • Char4Dew

      On vacation, it is too cold in NYC – somewhere the sun is shinning. :)

  • Guest

    They should’ve put Joe’s face on the other fighter. We all know observant Jews don’t have tattoos. C’mon TRD.

    • Char4Dew

      We also know that Andrew weighs at least 10 X more than this cartoon. :)

  • “Jumping Ship”

    Sitt does not think Heiberger can help TOWN grow.
    So the power struggle for control will be nasty.
    Sitt has already publicly crapped on Heiberger by firing him.
    Heiberger poached his high priced managers from CitiXHabitats…
    Let’s be fair, TOWN is in big trouble!

    • Char4Dew

      The goal is to fix the problem,
      not to affix the blame ~Jewish Proverb~

      Not going to happen here…
      so
      Humpty dumpty sat on wall….had a great fall. la,la,la,la

  • A Whole New World

    The business has changed so much in recent years and Town is such a old business model. Compounded by the low inventory, new firms energing and technology effectively cutting out the middleman. This is not surprising. Karma…..

  • Goodluckcharlie

    THIS ToWN is FINISHED. I wish my colleagues luck. Run away FAST!!!!!!!!

  • YoungREmogul

    Hope this can just be resolved soon. I don’t care how it ends, but end it soon. There are some great brokers for Town that are getting short ended with this news, but there are some crappy brokers there too…. It only degrades the outlook of today’s brokerages.

  • BrooklynNative

    This is not going to end well and both men’s actions indicate they don’t care about the people in their company. Doesn’t make any sense. After everything settles down all that’s going to be left is fancy marketing and a pretty brand. Any one worth anything will leave that crumbling establishment.

    • Char4Dew

      Correct. :)
      So if the brokers don’t run while they can, They will cry later.
      Me think all the people he put in charge are probably interviewing or sucking up.

  • LetsBeReal

    Surprise, the judge saw what everyone else already sees! Nothing but a power play by Sitt to gain control of an asset, failing to realize this ain’t a Fifth Avenue retail property with unshakeable value but a services business that’s only as good as its reputation and relationships. He and Heiberger have built something impressive but it’ll die a slow death (and millions of investment will be gone) if Joe doesn’t come to his senses and realize this isn’t good for anyone, not even him. Nuclear tactics might’ve worked in previous partnership fights but he must realize this is different… people don’t want to work under this sort of cloud. Work it out Joe, lotta people counting on you!

  • Truth Shall Set You Free

    No doubt Sitt and his CFO had right to approve every dollar that was spent, but
    somehow it’s not their fault? Mighta cost a lot but Heiberger, Wendy, etc.
    built the brand Sitt wanted and now he’s willing to jeopardize it all? Makes no
    sense unless someone’s giving him bad advice or Joe’s investors are busting his
    chops and wondering why they didn’t stick to retail. He’s gotta know better you’d
    think.

  • JPk

    Brokers should know better to join w Heiberger again. He doesnt have the patience to grow organically. Maybe its bc of the nose candy or the alleged Napoleon in the pants Complex. (Apparently he also lost a ton in the more recent of his divorces) So he brought in Sitt. Town doesnt turn a profit & Heibergers solution is to spend more money in order to convince others to falsely believe they are. Still no profits? Then spend more money. It’s a relentless bluff. The sadder part is the brokers & many others believed it. & will believe it again bc greed rules the day. Wolf of Wall Street on a smaller yet more obese scale. Not sure why he hasn’t been legally restricted from real estate altogether.

  • Oouch

    This can best and most fairly be described as a self-inflicted wound. Thor just hit itself in the head with a hammer, and instead of learning it is doing it again and again.

  • GO FOR IT…

    Maybe they will “Kiss and Make up”…
    We can hope for the best!!!

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