Broker files suit over Tootsie Roll factory commission

Alan Rosenstein claims he received none of the $500K owed for selling Clinton Hill property

TRD New York /
Dec.December 01, 2015 03:02 PM

How many licks does it take to get to the center of a commission dispute? Alan Rosenstein of Redstone Capital Group, one of the brokers on the $68 million sale of the Chocolate Factory building in Clinton Hill, is about to find out.

Rosenstein filed suit Monday against fellow broker Roman Khodosh of RK Capital Group, alleging that Khodosh withheld payments to him and accepted more in commission than he was entitled to in the Aug. 2014 sale.

Rosenstein and Khodosh, alongside broker Stephen Steiner of Stratus Capital, allegedly entered an oral agreement in February 2013 to collectively broker the former Tootsie Roll factory, which is located at 255-275 Park Avenue in Clinton Hill and was converted into a 123-unit rental building by developer Aleksander Goldin in 2002.

While the brokers agreed to individually solicit potential buyer for the factory – with each receiving a share in the commission upon any sale — Rosenstein claims that he never received a cent of the $500,000 commission he was due, according to the lawsuit filed in New York State Supreme Court.

Brooklyn-based developer HK Organization paid $68 million for the seven-story, 206,000-square-foot property, with Goldin paying a broker’s commission of $1.25 million, according to the complaint.

Rosenstein claims it was agreed he would receive a 40 percent share of the commission upon any sale of the building, with Khodosh due only to receive a finder’s fee of 20 percent – as it was Rosenstein and Steiner who “were to actually perform the brokering services.”

But Rosenstein alleges that upon the deal’s closing in August of last year, Khodosh received $375,000, or 30 percent, of the commission from Steiner via wire transfer while Rosenstein “did not receive any part” of his share.

While Rosenstein “demanded that Khodosh remit the received excess commission payment of $125,000,” Khodosh “failed and refused” to do so, according to the lawsuit.

Steiner and Stratus Capital also faced a separate lawsuit over the deal from Rosenstein in October of last year, with Rosenstein targeting Steiner’s failure to pay him the commission he was owed. That lawsuit was settled and discontinued this past September.

An attorney for Rosenstein declined to comment on the matter, while a lawyer for Khodosh did not return a request for comment.

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