Wendy Maitland wants out of her noncompete at Town

Brokerage's former president of sales accuses co-owner Joe Sitt of "financial chicanery"

TRD New York /
Jun.June 22, 2016 07:00 AM

Wendy Maitland is looking to get out of the noncompete clause in her contract with Town Residential by accusing the firm of cooking the books.

In court filings submitted last week as part of Maitland’s lawsuit against Town, she accused the firm’s co-owner Joseph Sitt of “financial chicanery” and expressed “serious doubts as to the legality and ethics of how [its] books are kept.”

“I am the broker of record at Town, but have not been afforded the right to review Town’s internal records to determine where, among other things, Town has commingled funds,” Maitland, who served as the brokerage’s president of sales until last month  stated in the court documents. “Fees are paid to attorneys in the hundreds of thousands of dollars, while the cleaning service company is starved of payments owed. Vendors, such as photographers and floor-plan companies, call me for unpaid aging invoices regularly.”

Forcing her to operate in such an environment, Maitland claims, amounted to a breach of contract by Town. She is asking the court to declare her noncompete clause unenforceable.

The lawsuit Maitland filed in May accuses Sitt of starving the company of funds, thereby costing it agents, relationships with vendors and a new development exclusive as well as causing it to default on rent payments. Maitland became Town’s president of sales in 2014, at which time she began receiving a share of the firm’s net realized profit.

Sitt and Town co-founder and CEO Andrew Heiberger allegedly told her that their goal was to sell Town within a few years. As such, they convinced her to take a reduced income in return for a share of the profits from a future sale of the firm. Town was in advanced discussions to merge with Beverly Hills-based brokerage the Agency, but Heiberger said earlier this month that the deal was no longer happening.

Her most recent contract, dated 2014, also stated that for two years after the end of her employment with Town, Maitland could not participate in any activities involving real estate development, brokerage, leasing or sales in Manhattan and Brooklyn.

Maitland claims her noncompete should now be declared invalid, since it hurts her ability to make a living.

“Real estate brokerage in the upper end of the real estate market is virtually all that I know,” she said. “It is the only way for me — a single mother of two children and the chief support of my widowed elderly mother — to earn the income necessary to provide adequately for my family and myself.” It should be noted that Maitland was a psychotherapist for 10 years before getting into the industry.

“The clients that I brought to Town should remain with me because their loyalty is to me, not Town,” she continued. “Enforcement of the covenant in Town’s favor will not aid Town because, while it would bar my own clients from dealing with me, it would not aid Town in retaining those clients.” These clients, she said, include celebrities such as Bruce Willis, who she claims she knew before she joined Town.

Attorneys for Town contend that Maitland has more than enough money to support her family. A screenshot of her JP Morgan Chase bank account from March 10 which was included in court documents shows a balance in her savings account of $1.54 million.

Maitland was not immediately available for comment and a spokesperson for Town declined to comment beyond their response in the court documents.

One example of alleged “chicanery” by Sitt came in 2014, when he allegedly insisted that Town move its corporate headquarters to the 10th floor at 25 West 39th Street, a building owned by Sitt’s investment firm Thor Equities. The 10th floor was the only one occupied by Town.

However, when Town received a notice of default on the space in May, its premises was listed as the 10th, 11th and 16th floors, spaces that were occupied by Sitt and his affiliates at his real estate investment firm Thor Equities, Maitland claims in court papers.

“In other words, Town was contractually subsidizing Thor,” Maitland states. “Town was paying expenses that properly belonged to Thor…why Town would have been paying rent for floors occupied by Thor smacks of Mr. Sitt’s playing financial games with Town’s money.”

As for starving the company of funds, Maitland claims she was pulled aside by an Avenue Magazine executive at a photo shoot in February and informed that Town hadn’t paid for its ads in the magazine since the previous September. And the Wall Street Journal cut the firm off on its advertising due to unpaid invoices, she added.

BlueRock Real Estate, headed by Ramin Kamfar, also fired Town from the Charles condo project on the Upper East Side after finding out the company was cash-strapped and Maitland alleges she lost out on an assignment to market a $40 million condominium after it became clear that Town was in a financial “strait jacket.”

Town’s total rent obligations in March were close to $1.13 million for the first three months of the year, according to court papers.

Sitt has denied allegations that he starved Town of financial resources.

“Sitt provided Town with $1.625 million between January and April 2016 to ensure that no vendor went unpaid and that no vendor refused to provide services or ever stopped work due to unpaid invoices. All rents are current and with limited exception there are no vendor invoices due beyond normal terms,” an attorney for Town said in court papers.

They also allege that Maitland, while still at Town, improperly forwarded numerous Town emails, including an email discussing Town’s advertising strategy and budget, to her personal email account — a violation of her fiduciary duty. She also allegedly negotiated an agreement with a client who had an exclusive listing agreement with Town under the new name of “The Maitland Group” and directed all correspondence to her personal email and home address

As for the situation at 25 West 39th Street, attorneys for the company contend that the default notice for the three floors was simply incorrect and was later corrected.

Related Articles

Joe Sitt and 1725 Shore Parkway in Bensonhurst (Credit: Google Maps)

Thor sells Bensonhurst big-box store for $75M

Compass' Rory Golod and Robert Reffkin at 110 Fifth Avenue with Andrew Heiberger (inset) (Credit: Google Maps)

Town’s old office now “unrecognizable,” Compass says on moving day

Thor Equities chairman Joe Sitt and 1006 Madison Avenue

Thor in danger of losing Madison Ave property

545 Madison Avenue and Thor Equities' Joe Sitt

Thor Equities in hot water at 545 Madison

From left: Joseph Sitt, Yaron Jacobi and Uzi Ben Abraham; 117 East 15th Street, 1122 Madison Avenue and 96-33 Queens Boulevard (Credit: Google Maps, Getty Images)

Here’s what the $10M-$30M NYC investment sales market looked like last week

680 Madison Avenue and Thor Equities CEO Joe Sitt (Credit: Google Maps)

Joe Sitt’s Thor wants $370M for Madison Ave retail condo

Joe Sitt and 1725 Shore Parkway (Credit: Google Maps)

Thor Equities looks to sell BJ’s big-box store in Gravesend

Ex-Town exec Luciane Serifovic launches virtual brokerage