ISG blood feud could do lasting damage to firm, industry pros say

Legal battle between Craig Studnicky and Philip Spiegelman could lead to an exodus of clients

Sep.September 12, 2018 06:19 PM

Maile Aguila, Beth Butler, Phil Gutman, Craig Studnicky and Philip Spiegelman

As Craig Studnicky and Philip Spiegelman pummel each other in court over the fate of their brokerage, International Sales Group, the fallout could be far costlier than the dissolution of a long and successful partnership.

The duo’s legal battle could also lead to an exodus of major clients and key brokers as competitors look to capitalize on the now public rift, legal experts and competitors said.

Studnicky and Spiegelman are suing each other and their related companies in Miami-Dade Circuit Court, alleging mismanagement that caused serious financial problems at ISG. Court documents describe a company that was imploding.

The brutal breakup caught some ISG rivals by surprise.

“After seeing [Studnicky and Spiegelman] together for so many years, it’s unfortunate to see something like that,” said Phil Gutman, president of Brown Harris Stevens Miami. Gutman said he wouldn’t poach the wounded brokerage’s agents, but expected that some firms would.

“I wouldn’t want someone doing that to me,” he added.

Beth Butler, president of Compass Florida, said she doesn’t see the partner fallout as a recruiting opportunity.

“I don’t think people think this is the end of a business,” she said.

Spiegelman, however, is asking a judge to dissolve the company, saying Studnicky is ruining ISG and related entities because of mismanagement. He alleged that Studnicky is burning “through large amounts of cash” without producing any profits. In a counterclaim, Studnicky accused Spiegelman of having “overbearing narcissism,” “substance abuse problems” and “antisocial behavior” that has alienated ISG clients and employees. Studnicky is also suing to recover $1.8 million he claimed Spiegelman loaned ISG throughout the firm’s existence.

Larry Kellogg, an attorney specializing in corporate and securities law, said the lawsuit may have already inflicted serious damage on the company’s reputation. Lawsuits between former business partners can be worse than personal divorces, Kellogg said.

“If you are a client of theirs, you don’t want to be dragged into the middle of it,” he said. “If the partners and their lawyers can come to some quick agreement about separating, then the company can survive. The longer it goes, the harder that gets.”

Despite the bitter nature of the suits, Studnicky’s attorney, Robert Stok, insists ISG is not in any jeopardy. The brokerage is flourishing, he said, since his client took over full control of the day-to-day affairs in 2016.

“The company is functioning at a higher level and is very profitable,” Stok said. “Now that Philip Spiegelman is no longer around, the employees are happy. He was dragging down the company.”

Stok also claimed that a judge cannot grant Spiegelman’s demands to dissolve the company because ISG has a third managing member, Michael Ambrosio, who can break the deadlock. “A lot of the claims Philip Spiegelman makes are nonsense,” Stok said. “He embezzled $137,000 and the next day he filed a lawsuit to dissolve the company. He stole money that he doesn’t want to pay back.”

Spiegelman and his attorney did not return phone calls seeking comment.

Maile Aguila of Swire Properties said her firm planned to continue working with ISG despite the lawsuits. In a statement, Aguila said the litigation has no bearing on ISG’s performance as the exclusive agent for Brickell City Centre‘s condo projects, Reach and Rise.

“The ISG team have been incredible partners for Brickell City Centre and continue to build momentum for Reach and Rise,” Aguila said. “This personal legal matter has not had any effects with our sales team and we are continuing to operate business as usual.”

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