Neil Shekhter handed another defeat in court battle with AEW

The Santa Monica developer vows to continue fight over joint portfolio

TRD LOS ANGELES /
Sep.September 19, 2018 02:00 PM
Neil Shekhter and a rendering of NMS Properties’ Wilshire & La Jolla tower at 6401 Wilshire Boulevard (Credit: Urban Land Institute, Steinberg Architects)

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


Related Articles

arrow_forward_ios
WS Communities CEO Scott Walter and VP of Finance Gregory Proniloff, Madison Realty Capital’s Josh Zegen, 1433 Euclid Street in Santa Monica; and rendering of mixed-use project at 3030 Nebraska Avenue in Santa Monica (Credit: Google Maps and Madison Realty Capital)

WS Communities nabs $150M loan for six renovations and a development site

WS Communities nabs $150M loan for six renovations and a development site
6156 Ramirez Canyon Road and 20 37th Place (Credit: Redfin)

This way to the beach: Homes next to ocean topped priciest sales

This way to the beach: Homes next to ocean topped priciest sales
Shops were looted in Santa Monica (Credit: Mario Tama/Getty Images)

Looters cleared out retailers while police clashed with protesters in Santa Monica and Long Beach

Looters cleared out retailers while police clashed with protesters in Santa Monica and Long Beach
First District Supervisor Hilda Solis (Credit: Rebecca Sapp/Getty Images)

LA County select reopening target date for restaurants and retailers

LA County select reopening target date for restaurants and retailers
Related California CEO William Witte and the project site (Credit: Google Maps)

Related California eyes latest project in Downtown Santa Monica

Related California eyes latest project in Downtown Santa Monica
Eric Garcetti orders a moratorium on LA commercial evictions (Photo credit: iStock photo)

Garcetti orders a moratorium on commercial evictions in LA

Garcetti orders a moratorium on commercial evictions in LA
From left: Alan, Adam, and Alex Shekhter, with renderings of 501 Broadway and 601 Colorado (Credit: WS Communities and LinkedIn)

Shekhters’ WS Communities lands $157M loan to build 850 rental units in Santa Monica

Shekhters’ WS Communities lands $157M loan to build 850 rental units in Santa Monica
1314 7th Street, Santa Monica and Divco West CEO Stuart Shiff

Rockwood Capital pays $66M for Santa Monica phone building

Rockwood Capital pays $66M for Santa Monica phone building
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...