N. Richard and Jonathan Kalikow’s Gamma Real Estate — known for its lending platform and a controversial tower rising on Sutton Place — has been accused of bilking its former chief investment officer out of millions.
Richard Kulick, who credits himself with building out Gamma’s multifamily business, claims in a federal lawsuit that the Kalikows falsely accused him of stealing confidential information from the company in order to cheat him out of $10 million.
Kulick joined Gamma as CIO in 2015, with an annual salary of $180,000 and a 12.5 percent equity stake in SLP, an entity formed to funnel profits from the multifamily business to the SLP members, according to the complaint.
Kulick says he made Gamma’s multifamily business the most profitable division of the company, ultimately spearheading the purchase of 18 multifamily properties across the southeastern U.S. worth about $800 million. Gamma’s multifamily portfolio will see profits of “approximately $96 million in carried interest income” over the next three years, the suit says.
Around mid-2019, Jonathan Kalikow began inserting himself into the multifamily portfolio “to an unprecedented degree,” which the suit attributes to “the stagnation of Gamma’s lending business, which Jon Kalikow led.” The lending business was not generating new deals and was in default on more than 75 percent of its existing deals, the complaint states.
Gamma was also getting bogged down by 58 Sutton, a condo development at 430 East 58th Street that had become “mired in lawsuits over zoning restrictions and alleged conflicts of interest,” court papers say. Developer Joseph Beninati, who Gamma is holding liable for a $24 million guarantee tied to the loan on the development, filed for bankruptcy earlier this year.
“In Gamma’s multifamily business, Jon Kalikow saw an opportunity to claim credit for Kulick’s successes,” the suit says.
The interference made it difficult for Kulick to do his job, and he came to an agreement with Gamma that he would resign on March 31, 2020. The members of SLP told Kulick his departure would not impact his financial position in the LLC, the lawsuit says.
Before leaving, he transferred responsibilities to different Gamma employees, and took copies of some filings given his continued involvement in the portfolio — a move that Gamma authorized, according to court papers.
However, in an April 13 letter, Carol Goodman, an attorney for Gamma Real Estate, accused Kulick of wrongfully taking highly confidential information from the company, meaning Gamma had fired him for cause and did not need to pay him money from SLP, according to court papers.
Kulick’s lawsuit describes the letter as an attempt to “rewrite history” and as “a shamelessly transparent ploy” to cut him out of the money he is owed. He is suing Gamma for charges including breach of contract and unjust enrichment and requesting a jury trial from the court.
“Mr. Kulick looks forward to pursuing his rights in court given defendants’ behavior and their attempt to take his equity,” said his attorney Aaron Zeisler.
Goodman in a statement described the situation as “wrongful conduct by a former employee,” and said that Gamma denied Kulick’s allegations.