HFZ sued for $12M by former broker

New York /
Feb.February 28, 2013 03:00 PM

HFZ Capital Group is facing a $12 million breach of contract lawsuit from Jacqueline Finkelstein, a former senior vice president who claims the developer bypassed her on several real estate financing deals she procured and then purportedly fired her after she protested.

Finkelstein claims she arranged the financing for several deals — including the $170 million acquisition of 11 East 68th Street with Vornado Realty Trust in January 2012 — but was later frozen out of her share of commissions, according to a lawsuit filed Feb. 21 in New York State Supreme Court.

Finkelstein joined HFZ in December 2011; her contract specified a $180,000 salary, year-end bonuses based on deal volume, expense reimbursement, medical benefits and profit participation of at least 3 percent, the complaint says. Previously, she worked as a senior managing director at the Moinian Group.

The contract — with an automatic annual renewal and a 60-day written termination clause — was set to take effect following the completion of the 11 East 68th Street deal, the complaint states. According to the suit, Finkelstein arranged financing through New Valley Corp., the real estate arm of Miami-based Vector Group, the firm led by Howard Lorber that owns a 50 percent stake in Douglas Elliman.

But HFZ principals Ziel Feldman and Nir Meir allegedly attempted to use other brokers to complete her deals, and purportedly fired her last March over an alleged dispute over a $50 million financing deal for 20 West 40th Street, near Bryant Park.

Feldman and Meir were traveling on business and not immediately available for comment, according to an HFZ official.

Additionally, Finkelstein claims she helped arrange $22.4 million in financing for 11 Beach Street in Tribeca, after another broker failed to secure the financing for HFZ, as well as several of the developer’s deals with the Florida Regional Center, a North Palm Beach, Fla.-based firm that helps arrange foreign investment in U.S. businesses.

Nick Mastroianni, manager of the Florida Regional Center, confirmed that his firm helped arrange financing for the 20 West 40th Street project, a mixed-use condo hotel with retail and restaurants, but said he was not aware of other financing deals with HFZ.

He also confirmed that Finkelstein’s father, David Finkelstein, is chief financial officer at the center. According to the suit, the elder Finkelstein was involved in several meetings related to the deal.

“We look forward to obtaining justice for our client,” attorney Adam Leitman Bailey, whose firm is representing Finkelstein, told The Real Deal in an email. “Our adversary should be ashamed of himself for trying to steal her rightfully owed commission due.”

Bailey said he believes that Finkelstein continues to work for HFZ because she was allegedly not terminated in writing, according to the terms of her contract. However, Finkelstein’s LinkedIn profile lists her as principal of JSF Capital Investment Group and says that she stopped working at HFZ in July 2012.

Jacqueline Finkelstein was not immediately available for comment. A spokesman for Vector Group said the firm would decline comment.


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