New details of JC DeNiro’s recent closure are emerging.
Amidst an ugly legal battle between the two founders, the brokerage ran short of cash and was being evicted from its Chelsea office by the time the company’s closure was announced.
JC DeNiro failed to pay March or April rent for its 1,100-square-foot office at 174-A Ninth Avenue at 21st Street, according to the building’s owner, Charles Coutinho, who said he began the process of evicting the six-year-old boutique real estate firm in late March.
In a notice filed April 14 and obtained by The Real Deal, Coutinho asked for $16,274.14 in back rent and late fees, and informed JC DeNiro that if the amount was not paid within five days, the company would be required to “surrender up the possession of said premises to the landlord.”
A week later, The Real Deal reported that the small brokerage would close down, with most of its brokers moving over to Prudential Douglas Elliman, where Raphael De Niro, nephew of company founder Jack DeNiro (who spells his name differently), leads the De Niro Group.
Jack DeNiro, who got his start in commercial real estate in the 1960s, is actor Robert De Niro’s uncle; Raphael De Niro is the “Goodfellas” star’s son.
Elliman is not purchasing the business and has no written agreement with JC DeNiro, an Elliman spokesperson said, but is simply “accommodating” the brokerage’s agents.
JC DeNiro, formed in 2002 by Jack DeNiro and partner Christopher Mathieson, who has since left the company, first rented space at 174-A Ninth Avenue in 2003, Coutinho said. When the space next door became available in 2005, they rented that, too, combining it into one office.
But the company began to fall behind on the rent this summer, said Coutinho, who owns some 500 rental units in Manhattan and Westchester. Around the same time, JC DeNiro closed its Upper West Side office.
“They would accumulate two months [of unpaid rent], and then I’d have to do a song and dance with Jack and his attorneys to get it paid,” he said. “In March, they stopped making payments altogether, and they weren’t answering e-mails.”
Since then, the company has “ceased all communication,” he said, adding that Jack DeNiro personally guaranteed the leases.
In fact, court documents make clear that JC DeNiro’s cash flow problems started long before this summer, though the founders have different explanations for the shortfall.
Mathieson filed suit against Jack DeNiro in United States District Court in October of 2007, claiming that DeNiro had unlawfully seized control of the business.
Jack DeNiro and Mathieson met in Boca Raton, Fla., in August of 2002, according to court documents. They agreed to start a real estate brokerage firm in Tribeca with help from a Lower Manhattan Development Corporation grant.
Mathieson set about growing the business in New York while DeNiro remained in Florida. But relations between the two partners soon soured, with Mathieson leaving the company in September 2007.
The previous spring, according to Mathieson’s suit, DeNiro had changed Mathieson’s commission agreement, citing “financial difficulties.” But Mathieson alleged in his suit that it was DeNiro, not the company, that was short on cash.
“Mathieson learned that DeNiro was experiencing mounting financial problems with his own real estate ventures in Florida, resulting from declining market conditions, overruns, delays, hurricanes and litigations, and that DeNiro was liquidating his assets, including his primary residences,” the suit says. “As a result of these difficulties, DeNiro set in motion… a scheme to divest Mathieson of his position within [JC DeNiro] and to divert [JC DeNiro’s] liquid assets to himself.”
JC DeNiro had a gross income for June 2007 of $967,897, Mathieson’s suit says, the company’s highest month ever for gross commissions.
Mathieson also claimed DeNiro barred him from the company’s offices, defamed him in front of other employees and even stole his car, though it was returned two days later.
In a counterclaim, DeNiro painted a different picture of events. He stated that Mathieson mismanaged company funds, failing to pay the company’s bills and taxes while using the company’s money for his personal expenses, parking tickets and “excessive commissions to himself.”
The two parties settled the suit in January of 2009. Clarification appended
Jack DeNiro and his attorney did not respond to requests for comment.