Former Massey Knakal Brooklyn head sues
August 08, 2008 03:45PM By Lauren Elkies
Timothy King
Timothy King, a onetime chief operating officer and partner at Massey Knakal Realty, will square off with his former employer in Brooklyn Supreme Court on October 1.
King, a 30-year real estate veteran and former head of Massey Knakal Realty of Brooklyn, alleges in a $3 million lawsuit that when he tried to acquire accurate and audited financial statements, books and company records to determine the value of the company, the defendants -- the firm and founders Paul Massey and Robert Knakal -- "'stonewalled'" him.
Note: Correction appended
The suit, initially filed on June 30, alleges the company wanted "to hide the defendants' self-dealing, waste, breach of fiduciary duty and misappropriation of company assets."
King alleges in the suit that the company violated the Real Property Law and the New York Penal Law by paying "commissions, as referrals, to unlicensed people," including attorneys "with the intent to have the attorneys influence the choice of the company as the customers' real estate broker."
The judge ordered Massey Knakal of Brooklyn, a limited liability company under investment sales parent company Massey Knakal Realty Services, to prepare audited financial reports and balance sheets from 2002 to the present for a court appearance next Tuesday, which was adjourned until October.
The suit alleges that Massey Knakal "failed to provide audited financial statements for 2002 through 2007 as required in the company's operating agreement which was authored by the defendants."
King hopes to win $3 million "on behalf of Massey Knakal Realty of Brooklyn," which has six shareholders including King.
When asked to comment about the lawsuit, Massey Knakal CEO Paul Massey wrote via e-mail: "Ending a partnership is never easy. We wish Tim well in establishing his leasing business in Brooklyn."
King joined the firm in 2002 to run the new Brooklyn operation and, according to the amended complaint filed last month, he was given 10 percent ownership of the company plus income from 10 percent of its profits. Once the office began earning money in 2003, within four years it had sold more than $1 billion in Brooklyn properties, according to King's bio.
After holding the position as managing partner of the Brooklyn office, King was appointed Massey Knakal's first COO. He left the company in March.
He charges that the only financial records the firm would give him were "woefully inadequate to explain the transfer of funds from the company to affiliates or the details of the loans themselves."
The suit also alleges that by not "informing [the buyer and seller] of the dual agency or obtaining the written acknowledgement," the firm violated a rule against dual agency issued by the New York State Department of State, the agency that issues and oversees real estate licenses.
The Department of State did not immediately respond to a request for comment.
In May, King started CPEX Real Estate, a Brooklyn commercial real estate firm. He brought on board two Massey brokers plus another broker. For now, the firm is primarily focused on leasing deals in Brooklyn.
CPEX's Web site shows two investment sales listings, 15 retail listings, and four office listings. Last month the firm leased a 650-square-foot retail space at 32 Court Street to frozen yogurt shop Yofiore, for close to the $14,000 per month asking price.
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Comments
Anonymous
It would be interesting to see what happens sinse Paul Massey sits on te board at REBNY....
Comment #1 Posted By: Anonymous 08/08/08
Anonymous
wow!
Comment #2 Posted By: Anonymous 08/08/08
Anonymous
I hope Massey doesn't have anything to hide or this lawsuit will be their downfall. His allegations are very serious. At the very least, it's opening up a very, very big can of worms in Massey's books. This could get ugly. Massey should settle with this guy, though it may already be too late. Let the witch hunt begin.
Comment #3 Posted By: Anonymous 08/08/08
Anonymous
Indeed all NY attorneys are licenced as brokers, but still need to be 1099ed no?
Comment #4 Posted By: Anonymous 08/08/08
Anonymous
this is great
Comment #5 Posted By: Anonymous 08/08/08
Anonymous
MN = not so kosher.
Comment #6 Posted By: Anonymous 08/09/08
Anonymous
What the hell kind of name is CPEX?
Comment #7 Posted By: Anonymous 08/09/08
Anonymous
He might have been doing it too but no matter what type of person he is personally, the problem is that he has now set Massey up for investigation by higher authorties. Massey has a lot of enemies out there becasue they don't always play fair, so this could get ugly. Now is the time for Massey to spend some of that money they earned and to hire the best lawyers they can. Pointing the finger at this guy is a waste of time because once the goverment and courts get involved, it's on.
Comment #8 Posted By: Anonymous 08/09/08
Anonymous
Can lawyers get referral fees legally from lic RE bkrs?
Comment #9 Posted By: Anonymous 08/09/08
Anonymous
Yes lawyers can legally get referall fees from brokers. But, the dual agency without disclosure thing is a big no no. Massey seems to want to represent both buyer and seller in many of their deals, which is fertile ground for a claim like this. Massey might prevail in the end, but this is going to be a big pain in the butt for them. Maybe after this, Massey with "play nice."
Comment #10 Posted By: Anonymous 08/09/08
Anonymous
I think you still need to be licesned to collect a fee as an attorney. I know you don't need to do your hours and take a real estate agent test, but you still need to apply.
Comment #11 Posted By: Anonymous 08/09/08
Anonymous
This is what happens when the music stops, the one left without a chair always ends up playing sour grape, The market is very bad and MK business is a reflection of it.
Comment #12 Posted By: Anonymous 08/09/08
Anonymous
If he was a partner he must have knownledge that the books were cooked. Even the roman empire collapsed.
Comment #13 Posted By: Anonymous 08/10/08
Anonymous
This is really BIG. Could be the end to Massey Knakal. Everyone always wondered how they got so big so fast. Bah bye
Comment #14 Posted By: Anonymous 08/10/08
Anonymous
It all depends on whether Massey in fact did what is alleged. If Massey did do these things, I agree this could be the end of Massey. But if Mr. Massey is as ethical as he claims to be, maybe they will survive this. Either way, this is going to be a big headache because they will get investigated and this could get very ugly. Don't be surprised if we read about a settlement with the partner very soon. Massey, you better pay this man to go away. You don't want the feds on your back, and that's what's coming next.
Comment #15 Posted By: Anonymous 08/10/08
Anonymous
This sounds to me like the whole Massey Knakal Brooklyn operation was getting short changed.
Comment #16 Posted By: Anonymous 08/10/08
Anonymous
I think Robert Durst should mediate between these two, in drag. See what happens when you cut your hair Samson?
Comment #17 Posted By: Anonymous 08/10/08
Anonymous
Comment #18 Posted By: Anonymous 08/10/08
Anonymous
Yeah, Massey got too cocky.
Comment #19 Posted By: Anonymous 08/10/08
Anonymous
a
Comment #20 Posted By: Anonymous 08/11/08
Anonymous
I worked with Mr. King a few times, and never had a good feeling about him. Arrogant, and very bad at remembering names. The guys at Massey Knakal are some of the best in the business.
Comment #21 Posted By: Anonymous 08/11/08
Anonymous
Dear Comment #9- the company represents sellers. You are not going to find too many (if any) sellers that have bad things to say about the company. Baseless attacks, if you ask me.
Comment #22 Posted By: Anonymous 08/11/08
Anonymous
thats a splended picture of Tim i might say.
Comment #23 Posted By: Anonymous 08/11/08
Anonymous
Hmmmm, Would you leave the leading building sales company on your own? neither would I to start a no-name no platform company...so when you get pushed out what do you do???? what ever other person does..make false allegations sue...sue...sue.....tahts the american dream get rich quick,,,,the only ones who really get rich are the lawyers.....Let he is without sin sit in judgement.....but this is gonna be FUN I hope we get upto the minute reports on this one......I can I get Text updates on my Blackberry....sure beats more cheating politcians or more Barak Oframa stories....hehe
Comment #24 Posted By: Anonymous 08/11/08
Anonymous
Pro-Active obviously didnt work for tim
Comment #25 Posted By: Anonymous 08/11/08
Anonymous
now thats a low blow
Comment #26 Posted By: Anonymous 08/11/08
Anonymous
Tim King is an excellent broker and business man. He is well respected in the indusrty and will be successful in all he does.
Comment #27 Posted By: Anonymous 08/11/08
Anonymous
I think the Realdeal is happy with all the Massey bashing, hence this article is still open for comments.
Comment #28 Posted By: Anonymous 08/11/08
Anonymous
From the dealings I have had with them they seem on the level. Who knows what goes on behind closed doors of any company so one never knows - although they seem more ethical than most other companies. If I had to bet they will come out on top. Innocent until proven guilty.
Comment #29 Posted By: Anonymous 08/12/08
Anonymous
re comment #25- get a life.
Comment #30 Posted By: Anonymous 08/14/08
Anonymous
We do things the old fashioned way...we bribe em.
Comment #31 Posted By: Anonymous 08/15/08
Anonymous
Every dog has its day.
Comment #32 Posted By: Anonymous 08/15/08
Anonymous
This is a common way business is done. The only difference is that checks are traced and cash is not. Massey is known to ALLEGETLY doing this, but the difference in this story is that someone is talking about it. That company has done this for years and years. The argument strated ( ALLEGETLY ) because the person ALLEGETLY wanted more money and more money. IT IS ALLEGETLY that the other person did not see any reason to give so much money away for allegetly nothing. If the books are open it is allegetly that 100% chance of finding traces of this allegetely story to be truth.
Comment #33 Posted By: Anonymous 08/15/08
Where is the State of NY in all of this
For years their have been kick – backs and they are in several forms. It is common for leasing brokers to give back half their commissions to the tenant for the tenants build out. Some would say how is that a kick back, its above board? Well if there are five brokers and three don’t confess to this policy, then there is an unfair advantage that was created to the other brokers. This is not the norm by letting the tenant have half of the commission, but the exception. Another way kick – backs are done; a brokerage firm pays a commission to a broker by check but this person is not a broker. The State doesn’t require that brokers show their license or even give their license number during the process of co-broking. There are a whole slew of people who are getting paid as brokers who are not in this town...
Comment #34 Posted By: Where is the State of NY in all of this 08/16/08
Anonymous
it has become common that companies do not disclose financial information to their salesmen. I know of a company that charges their salespeople and associate brokers, thousands of dollars in expenses which they say are yours and they tell you they don’t have to give you an accounting, you just simply take their word, fight, or leave,. If you stay and fight, they hold onto your money unto you win, compromise or you get tired of fighting and concede. Do that to a couple of thousand brokers and the company comes out ahead each and every year. I find the State of New York is SLEEPING. I know of salespeople and associate brokers who have not been paid by their brokers, they write a letter to the State of New York and the State replies, “you have a right to sue your broker.” The State should be more responsible instead of stepping aside and say this is not our fight but yours. If you’re a salesmen and get screwed by your broker, all the State says is sorry…
Comment #35 Posted By: Anonymous 08/16/08
Anonymous
Comment #36 Posted By: Anonymous 08/16/08
Anonymous
Ask the people who know Tim (like Fillmore RE)how respected he is in the industry #28. The person who posted comment #22 is much closer to the mark on this guy.
Comment #37 Posted By: Anonymous 08/17/08
Anonymous
We’ll see who gets fined or goes to jail in 6 to 12 months for kick-backs in the industry. Don’t worry, it wont be anyone from the State Licensing Department that will be knocking on your door since they are they don't exist. Can anyone even tell me the Commissioners name at this Department? And it won’t be REBNY, since they should register as a lobbyist for the landlords. With all the fee’s they take from brokers, what was the last thing they did for them? I can name 20 things they have done for landlords. To this day, this has become the most unregulated industry.
Comment #38 Posted By: Anonymous 08/17/08
Anonymous
BaseBall Bats always work...
Comment #39 Posted By: Anonymous 08/18/08
E
#38 is right. REBNY is a JOKE.
Comment #40 Posted By: E 08/27/08
Anonymous
The Spinnola Family runs REBNY. They aren't even Jewish. They are a bunch of jokers. No one respects REBNY except the old fartsies, once they die, REBNY will collapse. I hope, so I don't have to pay them so they could have parties which I am not even invited to.
Comment #41 Posted By: Anonymous 08/28/08
Anonymous
#41, not too biased, are we? No wonder you're not invited to the parties.
Comment #42 Posted By: Anonymous 09/02/08
Anonymous
Wahhhh, business as usual, and who does a press release on a lawsuit unless your looking for leverage in a settlement. Those who can do, those who cant, sue!
Comment #43 Posted By: Anonymous 09/03/08
Anonymous
Hell, I'm not a fan of REBNY at all. what do they do for us brokers? they take your money and then don't even answer your questions. does everyone know that they don't even belong to, participate with, or encourage you to join National association of Realtors? NOPE, it's their word or nothing and frankly I choose nothing...ask them one day about why they don't belong to NAR, you'll be glad you did.
Comment #44 Posted By: Anonymous 09/16/08
Anonymous
MK STILL ROCKS at least massey doesn't have to right GOOD comments about himself unlike King!!!!!!
Comment #45 Posted By: Anonymous 11/21/08
Anonymous
Everyone talks bad about knakal because they are jealous that he still has hair, bolding a little Tim?
Comment #46 Posted By: Anonymous 11/21/08
Anonymous
Massey did much worse than this. I have evidence that would shut down their queens office. Wassup Brian, next time take care of people as promissed.
Comment #47 Posted By: Anonymous 01/02/09
Anonymous
Unfortunately, only nyc is unregulated, with no central mls system. You're right about NYS Licensing being asleep. Should enough folks write to the Attorney General, maybe steps will be taken to correct all this.
Comment #48 Posted By: Anonymous 02/19/09
Anonymous
I have known both Bob and Paul for over twenty years. They are two of the best in the business! Sounds like sour grapes.
Comment #49 Posted By: Anonymous 07/05/09
Anonymous
I think the grapes are rotten, not sour
Comment #50 Posted By: Anonymous 07/26/09
Anonymous
I worked as a sales broker at Massey, and it is compleatly and utterly clear that they dip into the fund, ( look real good in that Rolls Royce there paul massey) Did someone say IRS?
Comment #51 Posted By: Anonymous 07/30/09
Anonymous
paul has a rolls ?
Comment #52 Posted By: Anonymous 08/22/09