The Real Deal Los Angeles

“Hogs get slaughtered”: AEW claims NMS forged documents in joint venture lawsuit

Now a mini-trial will determine whether NMS' $100M lawsuit against the hedge fund gets tossed

October 17, 2016 03:00PM

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Neil Shekhter and a rendering of NMS Properties' Wilshire & La Jolla tower at 6401 Wilshire Boulevard (Credit: Urban Land Institute, Steinberg Architects)

Neil Shekhter and a rendering of NMS Properties’ Wilshire & La Jolla tower at 6401 Wilshire Boulevard (Credit: Urban Land Institute, Steinberg Architects)

The plot has thickened in a legal battle between Santa Monica developer Neil Shekhter of NMS Properties and real estate hedge fund AEW.

In a motion filed in Los Angeles Superior Court last week, the defendant, AEW, claims the plaintiff, Shekhter, forged the joint venture agreement included in his complaint, Law360 reported. As a result, Superior Court Judge Suzanne G. Bruguera called for a mini-trial to determine whether or not to toss Shekhter’s case, which alleges AEW broke the terms of the agreement.

“In my opinion, there’s a lot of blatant forgery taking place, I think it’s probably one of the top five cases I’ve had in my career where the forgery was just so blatant,” said Gerry LaPorte, a former Secret Service forensic chemist and director of a forensics unit under the U.S. Department of Justice, who AEW called to the stand, according to Law360.

The $100 million lawsuit brought in 2014 by Shekhter and other companies with interest in apartment buildings alleged that the plaintiffs negotiated a 2010 joint venture deal with AEW on the condition they could buy out the hedge fund after a few years, but that AEW refused to abide by those terms.

The plaintiffs filed a second complaint in 2015 with additional allegations against Gibson Dunn, who represented AEW in the first-filed lawsuit, along with a host of other people and businesses. That complaint led with the phrase, “Pigs get fat, hogs get slaughtered,” and quoted lyrics from the Eagle’s Don Henley. That suit was voluntarily dismissed, and the plantiffs amended their claims this year in a third complaint in 2016. 

But now AEW is striking back with its own claim that the joint venture said Shekhter could buy out its shares after five years — not three. AEW called on chemist LaPorte Friday to testify that Shekhter had tweaked several documents to fabricate the three-year claim.

Specifically, the alignment of text in one of the documents was off and a signature of an AEW executive seemed to have been inserted from another document, LaPorte said.

Shekhter’s attorney objected to the testimony, arguing that due process was violated because they were not given notice of the expert witnesses, but Judge Suzanne Bruguera decided to allow the hearing to continue. It continues Monday. [Law360]Cathaleen Chen