The maximum headaches at Max Capital Management Corp. are subsiding with the increased likelihood of a settlement between Adam Hochfelder, the real estate wunderkind who helped found the investment firm, and his partner Anthony Westreich, which would end a protracted battle for control of the $1.1 billion portfolio.
“It’s going to be closed soon,” company spokeswoman Roxanne Donovan said in late August. “I’ve been representing Max Capital for a long time, and this is the most optimistic I’ve ever been, and that’s good news for the company.”
No agreement had been worked out by press time, but people who know the company said the tension and hostility that marked chief executive and chairman Hochfelder’s rift with Westreich, the company president and son of a Virginia property magnate, ebbed considerably as the summer progressed.
Neither Hochfelder, who owns 51 percent of Max Capital, nor Westreich, owner of the other 49 percent, would comment for this article. Sources close to the firm say the principals mutually agreed to refrain from discussing the conflict.
If a settlement is reached, observers suggest that Westreich will continue to specialize in lease management, while Hochfelder will return to the wheeling and dealing of buildings that characterized the initial approach of Max Capital.
According to industry observers and previous reports, Westreich’s style is far less aggressive than Hochfelder, and his vision of the company curtailed its acquisitions.
Based on Max Capital’s track record, in which it did 21 major deals in its eight-year history, Hochfelder takes a markedly different approach to real estate.
The current split is not the first time Hochfelder’s business pairings have led to conflict. The current head of Max Capital is still embroiled in a lawsuit brought by former partner Richard Kalikow, with whom he founded the firm in 1996. Kalikow, a veteran real estate investor, teamed up with Hochfelder, and the company amassed a $2.7 billion portfolio estimated at 8 million square feet at its height – all while Hochfelder was still in his early thirties.
At different times, Max’s holdings included 230 Park Ave., the former Conde Nast Building at 350 Madison Ave. and 450 W. 33rd St., the home of the Daily News. Its four-building portfolio is now estimated at 2 million square feet of space.
After a disagreement over the direction of the company, in 2002 Hochfelder eventually bought out Kalikow for about $35 million, according to published reports. Kalikow then sued his former partner and Hochfelder’s wife, Amy Hochfelder, for allegedly withholding information he claimed would affect the purchase price.
That lawsuit, and a countersuit Hochfelder filed against Kalikow in 2003, continue to drag through the Supreme Court of the State of New York. According to court records, Judge Charles Ramos dismissed five of Kalikow’s nine complaints, but neither case has been resolved.