The principals of ISG are heading for a nasty business divorce
Craig Studnicky, Philip Spiegelman trade bitter lawsuits, throwing future of top luxury brokerage into question
UPDATED, Sept. 11, 6 p.m.: The founding principals of one of Miami’s most prominent luxury brokerages are warring with each other in court, The Real Deal has learned, putting a 23-year-old partnership and the future of the firm in jeopardy.
Craig Studnicky and Philip Spiegelman, who together run International Sales Group, are accusing each other of gross mismanagement, out-of-control spending and substance abuse, among other misdeeds, court documents show. Spiegelman is pushing a judge to dissolve ISG, which claims to have done over $10 billion in sales since its founding, and is currently the exclusive brokerage for notable developments such as Brickell City Centre, Echo Brickell, Muse in Sunny Isles Beach, Alton Bay in Miami Beach and W Residences Fort Lauderdale. The company also authors the ISG World Miami Report, seen by many as a barometer for the area’s condo market.
Reached by cellphone, Studnicky would only say that “Philip and I are hopeful we can resolve our differences amicably in a short period of time.” Spiegelman did not respond to requests for comment, nor did attorneys for both executives.
In 2016, Studnicky and Spiegelman announced they were branching into development by kicking off the first phase of an $82 million mixed-use project on a riverfront site they co-own in New Orleans.
However, their business relationship began to deteriorate around the same time, according to a lawsuit the Spiegelman-owned Monogram Marketing filed on May 23 against ISG and Craig Nicole Inc., a company controlled by Studnicky.
The complaint states Monogram and Craig Nicole own ISG and that the company, which was incorporated in 1995, has no operating agreement. In mid-2016, Spiegelman claims he and Studnicky “began having a difference of opinion on how to manage the affairs of ISG.” Later that year, Spiegelman wanted to shut down ISG but Studnicky wanted to keep the brokerage open, according to the suit.
The pair, according to the complaint, discussed a scenario in which Studnicky would manage the day-to-day affairs and Spiegelman would take a reduced share of the profits. While the complaint says this agreement was never formalized, it claims that Studnicky took over full management of ISG and four related entities since then.
Spiegelman accuses Studnicky of burning “through large amounts of cash” that ISG made in sales commissions and failing to deliver any profits. The complaint states that ISG has overhead and recurring expenses of more than $2.4 million, though “it should be one-fifth that.” Spiegelman further alleges that Studnicky retained unnecessary staff and “fronted clients who are continually late in reimbursing ISG.”
On June 22, Studnicky responded with a haymaker of a counterclaim riddled with personal attacks against Spiegelman. Studnicky alleges, for instance, that a third founding partner, Michael Colodny, disassociated himself from ISG due to Spiegelman’s “overbearing narcissism and obnoxious personality.”
“Spiegelman alienated himself from every major client to the point not one of them will even allow him to attend meetings with them,” the counterclaim states. His “substance abuse problems and his anti-social behavior and inebration caused him to be unable to function in any productive capacity.”
In addition, Studnicky refuted Spiegelman’s claim regarding the reason why his ownership stake in ISG was reduced. “Spiegelman went through a financially devastating divorce and did not have the financial ability to make required capital calls,” the counterclaim states. “In turn, Studnicky and [Craig Nicole] agreed to fund and operate the Florida operations.”
Studnicky wasn’t done though. On July 20, he filed a separate lawsuit against Monogram, ISG and four related entities to recoup in excess of $1.8 million Studnicky claims he loaned the company to keep it afloat when operating shortfalls occurred.
An earlier version of this story misidentified the third founding partner who allegedly disassociated himself from ISG.