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
By Katherine Clarke | February 28, 2014 03:00PM

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 Sitt’s ability to appoint new managers to the company — and thus control its board — was not rescinded by the order, however.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.