UPDATED, Dec. 19, 6:11 p.m.: National brokerage Coldwell Banker terminated its franchise agreement with the embattled Bellmarc Group today amid claims that the Manhattan firm failed to pay thousands of dollars in fees, both companies told The Real Deal.
Bellmarc and the San Francisco-based Coldwell entered into a franchise agreement in 2013, but their relationship took a nosedive this summer when Bellmarc co-founder Neil Binder was sued by his business partners, who alleged he embezzled hundreds of thousands of dollars from the company.
Amid the infighting Bellmarc was evicted from its Lexington Avenue office. Coldwell also asked a judge to appoint a receiver to oversee the franchisee’s finances, claiming it was owed $270,000 in fees.
A representative from Coldwell told TRD late Friday afternoon that it had severed ties with the struggling brokerage.
“Effective immediately, Coldwell Banker Real Estate has terminated its franchise agreement with the Bellmarc Group due to the brokerage’s continued failure to meet its contractual obligations,” company spokesman David Siroty wrote in an e-mail.
But in a letter circulated to Bellmarc’s managers, Neil Binder disputed Coldwell’s claim that it was owed fees.
“Bellmarc’s position is that these fees are not appropriate, and are offset by far larger amounts owed by Coldwell Banker to Bellmarc,” read the letter, which was obtained by TRD.
A Bellmarc spokesperson said the two companies had recently been in negotiations regarding the partnership.
“While we are disappointed by this turn of events, we believe any differences of opinion can be resolved through ongoing discussion, and we intend to continue working with them constructively,” a spokesperson wrote to TRD.
In August, Bellmarc business partners Anthony DeGrotta and Larry Friedman sued Binder in for allegedly embezzling money and using the firm as his “personal piggy bank.”
The suit further claimed that Binder took money from an escrow account that was used for employees’ health insurance premiums. Instead, the lawsuit stated that the funds were used for a lavish lifestyle.
The suit was settled earlier this month and resulted in DeGrotta’s and Friedman’s departure from the firm. The two now work at Keller Williams. Friedman and DeGrotta transferred their ownership to a “third party.” Binder, who co-founded Bellmarc in 1979, remained as the sole operator of the firm.
Claire Moses contributed to this report.
This article was updated to include information from a letter Bellmarc circulated to managers.