After enduring legal battles over a robotic car elevator at a Brickell condo and a suit filed by Airbnb, Miami developer Harvey Hernandez is facing another hurdle.
Hernandez’s co-founder and minority partner at NGD Homesharing, who was fired from her position as chief marketing officer, is suing Hernandez and NGD Homesharing. She alleges that the company is headed to insolvency and needs a court-appointed receiver. NGD is just one of the businesses Hernandez uses for development work, along with Newgard Realty and Newgard Development Group.
Cindy Diffenderfer accuses Hernandez of using NGD funds to settle a legal dispute with another co-founder, Barbara Salk, for $275,000; for vacations to France, Spain and Aspen, Colorado; for yacht fuel and for plastic surgery.
Her latest volley, filed in court documents last month, seeks a receiver for NGD. She calls the demise of NGD “more than a probability at this point,” documents show. A hearing is scheduled for December.
Diffenderfer first filed suit against NGD and Hernandez in April 2019 in Miami-Dade Circuit Court, two months after she was fired. She claims she was wrongfully terminated and is owed more than $600,000 in deferred compensation from her time working for NGD.
Attorney Neil Kodsi of White Plains, New York-based Jackson Lewis, lead counsel for NGD and Hernandez in the case, denied Diffenderfer’s allegations to The Real Deal. He said his clients “are looking forward to their day in court to defend themselves from these false allegations.”
According to court documents, Hernandez claims he doesn’t owe Diffenderfer money, that she was an at-will employee, was terminated appropriately and that she was not fired as a retaliatory measure.
Diffenderfer’s attorney declined to comment on the pending litigation.
In January, Airbnb sued NGD over a soured partnership on Niido-branded apartments dedicated to short-term rentals. The deal included about $10 million in investment from Airbnb. The company alleged Hernandez inappropriately lent himself about $1.5 million from the investment. Hernandez countersued and accused Airbnb of attempting to use confidential business information. The two companies settled in March for an undisclosed sum.
In her court filings, Diffenderfer alleges that Hernandez spent half the Airbnb investment in five months. By May 2019, the company operated at a $500,000 a month deficit, she alleges. Diffenderfer said the company was never profitable and that Hernandez improperly shut her and other investors out of ownership interest in the Airbnb branded properties, according to her suit.
She is now seeking a court-appointed receiver to oversee NGD’s accounts, assets and subsidiaries, and wants Hernandez to repay funds he borrowed from the company, court documents show. Diffenderfer fears Hernandez will dilute her interest in NGD by seeking more investment capital this year to keep NGD afloat, according to the documents.
She also believes his alleged past actions will result in misuse of whatever money NGD has left, including a $1 million loan from the federal government’s Paycheck Protection Program, or PPP, the suit states. In court filings, she accuses Hernandez of lying on the PPP application, by saying the company had 16 employees instead of seven at most.
Diffenderfer further states in her filings that NGD lost its two management contracts for Niido-branded properties in Kissimmee and Nashville, due to non-performance.
In 2017, Brookfield announced a $20 million investment in the 324-unit Niido-branded Kissimmee property. Brookfield said the investment was the start of a $200 million total investment in the Niido-Airbnb project. The deal would give Brookfield 25 percent of revenue for every apartment subleased through Airbnb at the Niido properties. New York-based firm Silverpeak Real Estate Partners also invested $20 million of equity into the venture.
Brookfield has since terminated property management contracts with NGD as a result of the Airbnb lawsuit, according to Diffenderfer’s lawsuit.
The 51-story Natiivo Miami is supposed to complete construction in 2022. In March, the commercial arm of One Sotheby’s International Realty launched sales of 104 office condos, The Real Deal previously reported.
Hernandez’s previous developments include Centro and Brickell House in Miami. Last year, four years after unit owners at Brickell House reported issues with a robotic car garage, a Miami-Dade judge awarded the condo association $40.6 million. The amount was in addition to a $32 million settlement awarded to the condo association in 2018, paid by the elevator’s insurer, the Hartford Steam Boiler Inspection and Insurance Co.
Diffenderfer founded Miavina in 2014 and continues to serve as CEO of the provider of internet-connected machines that pour wine by the glass. Earlier this year, she helped start companies Orion Haus and The Felyx to develop her own Airbnb-minded apartment buildings for short-term rentals, according to her website.