New York developer Jason Halpern has escaped having to pay more than $2 million to his former partner in the development of a failed W Hotel in Las Vegas, following a ruling from Nevada’s Highest Court, The Real Deal has learned. The thorny legal battle — which has continued for nearly seven years across two states — originates in a dispute over the canceled $2.5 billion project, which would have included 3,000 hotel rooms, luxury condominiums and 75,000 square feet of gaming space. Halpern was developing the complex with the Dallas-based Edge Group.
Brian Roche, a former tight end for the Dallas Cowboys, filed suit against Edge in 2006, alleging his group was pushed out of the original development team. Edge ultimately settled the case for $550,000, and incurred another $1.3 million in legal fees. In December 2010, a Nevada judge ruled that Halpern and other investors had agreed to indemnify Edge against such litigation, leaving him on the hook for the $2.08 million payment.
Subsequently, in July 2011, Edge sued Halpern in New York State Supreme Court, alleging he fraudulently shielded his assets — including a $3 million apartment at 166 Perry Street in the West Village — to avoid coughing up the payment, as The Real Deal previously reported.
Yesterday, however, the Nevada State Supreme Court overturned the judgment in the indemnification case, effectively letting Halpern off the hook in New York as well.
“We agree and conclude that the indemnity provision here does not explicitly state Halpern’s intent to indemnify Edge for its own wrongdoing,” the ruling said.
The decision also reversed an award of attorney fees, costs and interest awarded to Edge.
“Mr. Halpern is gratified that the Nevada [Supreme Court] properly vacated a clearly erroneous decision,” William Fried, a partner at Herrick Feinstein who represented Halpern, told The Real Deal today. “Edge has used that erroneous decision to harass Mr. Halpern by filing multiple lawsuits containing wild, false and outrageous allegations accusing him of, among other things, fraudulent conveyances.”
The decision, Fried added, would be the “first step in repairing the damage done to Mr. Halpern’s reputation.”
“I expect that in the light of this judgment the actions here will be resolved,” said Scott Ziluck, an attorney at Halperin Battaglia Raicht who represented Edge in the New York case.
In September 2011, Halpern’s company, JMH Development, was named in a separate racketeering suit by two local unions. That suit was also dismissed in February of this year, Fried told The Real Deal today. Halpern is the developer of 184 Kent Avenue, a converted Williamsburg rental building, among other projects.
Executives from Edge did not immediately respond to requests for comment.