It seems the legal warfare will never end between Santa Monica developer Neil Shekhter and his former joint venture partner, AEW Capital Management.
The latter filed yet another lawsuit against Shekhter, accusing him of deceiving banks and lenders with fake contracts that conflate the terms of their joint venture agreement by more than half a billion dollars, the Santa Monica Daily Press reported.
The latest lawsuit claims that Shekhter, his family, and his employees created fake documents and sent them to at least five lenders, acting like a “criminal enterprise,” in order to confuse the terms of its joint venture agreement with AEW. The allegations, which say NMS gave the forged documents to parties interested in buying the properties from AEW, go beyond the joint venture document forgery accusations in AEW’s initial complaint.
As the legal drama plays out, Lincoln Property Company has been appointed to manage the two firms’ nine disputed properties. The rent it collects will go into an escrow fund until a resolution is reached.
In December, a judge found that Shekhter forged contracts and destroyed evidence in his 2014 lawsuit against AEW, through which NMS attempted to buy out the hedge fund from their joint ownership of the apartment complexes in Santa Monica, L.A., and West Hollywood. The judge gave AEW full control of the properties, and AEW promptly sold them to a San Francisco developer. Later, however, an appellate court judge put a halt on the previous ruling, creating confusion about the fate of the already sold portfolio.
Shekhter has filed eight lawsuits against AEW to date, according to AEW’s attorney James Fogelman of Gibson Dunn. If the judge rules against him in AEW’s rebutting complaint, NMS could pay up to millions of dollars in damages, the Daily Press reported. [SMDP] — Cathaleen Chen