The courts have dealt Neil Shekhter of NMS Properties another blow in his Herculean fight against hedge fund AEW Capital over a nine-building Santa Monica property portfolio they once owned together.
The California Supreme Court declined to hear an appeal from Shekhter, the founder and CEO of NMS Properties, of a lower court decision earlier this year that upheld a judgment against him. The decision validates AEW’s 2016 sale of the portfolio for $430 million, according to the Santa Monica Daily Press.
NMS and AEW have been locked in court battles since 2014, when NMS, based in Santa Monica, tried to buy AEW out of the partnership for $106 million. AEW said NMS forged the agreement that NMS claimed allowed such a buyout, then took over control of the properties and sold them.
Shekhter sued, but the courts consistently ruled against him. AEW investigators uncovered evidence the Shekhter destroyed computer evidence related to the case. That led AEW to file a complaint against Shekhter under the Racketeer Influenced and Corrupt Organizations Act, or RICO Act. This week’s decision, along with a June 2017 decision against Shekhter to dismiss the RICO claims, means the suit can move forward.
Still, Shekhter isn’t giving up. His lawyer said that certain claims regarding the buyout provisions in the joint venture agreement weren’t addressed in the decision. Shekhter will file a new complaint next week alleging AEW committed fraud, according to the Daily Press.
He’s also still building. He filed plans for an 89-unit apartment complex at 11001 Pico Boulevard on the Westside in June.
An NMS spinoff called WS Communities is also active, filing plans for a 40-unit mixed-use building in Santa Monica in August. [SMDP] – Dennis Lynch