Miki Naftali is firing back against his protégés Victor Sigoura and Drew Popkin, accusing the two of biting the hand that fed them and alleging they stole confidential financial data and trade secrets from the Naftali Group.
The developer is seeking damages of at least $15 million, a restraining order preventing them from competing directly with him, and a permanent injunction to stop them from using the information, according to a lawsuit he filed Wednesday in New York State Supreme Court.
“Miki shepherded them, he taught them, he gave them opportunities when others would have canned them,” Y. David Scharf, an attorney for Naftali , told The Real Deal. “No good deed goes unpunished.”
The suit comes just weeks after Sigoura, the Naftali Group’s former chief investment officer, and Popkin, its former head of acquisitions, sued Naftali, claiming he refused to pay them their agreed-upon share of profits from deals. The duo, now principals at Highpoint Property Group, are seeking damages of at least $8 million. In their own complaint, also filed Wednesday, Sigoura and Popkin claim their former boss made $150 million thanks to their efforts and then “effectively ‘checked out’” of the New York real estate industry and showed no interest in doing deals.
“It’s unfortunate that Mr. Naftali thinks that he will be able to avoid paying millions of dollars he rightfully owes Sigoura and Popkin by bringing this frivolous suit,” Stephen Meister, an attorney for the duo, told TRD on Wednesday. “We remain hopeful he’ll decide to do the right thing.”
The two lawsuits paint starkly different portraits of what went down at the Naftali Group, a developer with projects such as 210 West 77th Street, 221 West 77th Street and 275 West 10th Street. According to Naftali’s complaint, he took Sigoura and Popkin under his wing, taught them the tricks of the trade, gave them considerable responsibility, and promoted their standing in the industry. They received “handsome” salaries and benefits, the complaint states, as well as a share of the firm’s profits and the chance to co-invest alongside the developer in real estate ventures. Naftali even allowed Popkin to live rent-free in one of the firm’s projects, the complaint states.
“In their five years with the Naftali Group, each Defendant earned many millions through such investments,” the complaint states. Scharf, Naftali’s attorney, also said that both Sigoura and Popkin had been paid “every dime that they were supposed to get,” and that he intended to move to dismiss their suit.
Naftali’s complaint describes him as a forgiving boss, willing to look past instances of “disloyalty,” such as when Popkin allegedly used his position at the Naftali Group to promote his lighting business — an allegation a source close to Popkin described as “mudslinging.”
Naftali also alleges that beginning in late 2014, Sigoura started to spend less time at work, and Popkin’s productivity plummeted as well. After being warned by Naftali that unless he contributed to the firm he would not be paid a salary, Sigoura asked Naftali to keep him on at minimum wage so he could avail of the company’s health benefits, a request that Naftali claims he agreed to.
But according to Sigoura and Popkin, it was Naftali whose head wasn’t in the game. The developer, they claim, “began to wind down the business” around April 2015 and spent days on on his yachts, planning trips or developing a book about himself. All deals at the firm, they claim, were “sourced, negotiated and closed,” by them— not by Naftali.
Naftali has been very open about his view that the market isn’t ripe for deals, and has said repeatedly that he is biding his time, focusing the firm’s energies on construction, sales and leasing of current projects. When TRD interviewed him about Sigoura and Popkin’s departure on June 8, he acknowledged the firm’s acquisitions department had “not been busy for a while.”
After Sigoura and Popkin left, Naftali says he received emails from personal friends about Highpoint’s announcement, which led him to suspect that Sigoura and Popkin may have taken his private contacts. The Naftali Group then hired an independent forensic expert to track their activity, an investigation that, according to the complaint, revealed “a nefarious picture.”
Naftali alleges that Popkin entered the Naftali Group’s office on the evening of June 5 with an unidentified guest and left the premises with “at least one large duffel bag and a backpack.” A source close to Popkin told TRD that Popkin was just retrieving his personal effects.
But Scharf says Sigoura and Popkin stole contacts for Naftali’s clients and investors, as well as proprietary financial models, with the intention of using them for Highpoint.
“If there really was no business,” Scharf said, “why were they stealing data and deleting everything?”