Sol Goldman heirs spill secrets in fight over $2B portfolio
Lawsuit exposes one of New York real estate’s most private families
The heirs to Sol Goldman’s fortune have declared war on each other, and in the process are spilling the secrets of one of New York real estate’s most private families.
Jane Goldman, daughter of the late property mogul, is being sued by her sister and the three children of her recently deceased brother. They accuse her of a power grab and of maneuvering to muscle her relatives out of the family fortune.
Her sister, Amy Goldman Fowler, and nephew Steven Gurney-Goldman claim in the lawsuit that when Steven’s father Allan died last year, Jane usurped power of the family company, which is supposed to be run jointly by four branches of the Goldman family.
“Jane, however, had no intention of sharing control, let alone with her siblings,” reads the 134-page complaint. “Her father had presided over his empire without partners challenging his authority. As Jane saw it, she was naturally his heir apparent, even if her brother and sisters legally also had a claim to the estate.”
The dispute is largely about the value of the Goldman portfolio, which spans more than 250 properties. After years of squabbling over the direction of the company, the family members set up a system allowing them to cash out their stakes by selling them back to the family company.
The price they’d get is determined by an appraisal, but Amy and Steven accuse Jane of putting her thumb on the scale so she could buy the shares at a deep discount. They’re suing for unnamed damages and asking the court to order a new appraisal process.
Jane Goldman’s attorney told The Real Deal that she denies the dissenting family members’ accusations.
“It is unfortunate that the plaintiffs have resorted to sensationalistic and baseless allegations in their campaign to try to extract unfair benefits for themselves,” Jason Cyrulnik of Cyrulnik Fattaruso said in a statement. “We look forward to thoroughly refuting plaintiffs’ allegations in the courts.”
After Sol Goldman died in 1987, he left control of his empire to his four children: Jane, Amy, Allan and Diane Goldman Kemper.
While the four owned equal shares in the company, Sol Goldman Investments, the business was long run by three managers: Jane, her brother Allan and SGI employee Louisa Little.
When Allan died in January of last year, Amy was designated to take over his management role, according to the lawsuit. But Jane allegedly sidelined Amy by excluding her from management decisions and appointed Little as an independent trustee of certain family trusts.
The lawsuit alleges that Little was beholden to Jane, who thus had complete control over the family business.
“With Louisa wholly aligned with Jane and serving at Jane’s mercy, Louisa cast the pivotal second vote,” the lawsuit said. “Jane excluded Amy from management decisions, notifying her only after the fact, if at all — a clear violation of SGI’s operating agreement.”
The complaint summed up its case with a reference to a popular HBO drama:
“In what is best described as a real-life parallel to the television show Succession, defendant Jane Goldman has engaged in a brazen and illegal scheme to wrest control of the largest privately owned real estate empire in New York City from her family members.”
Anticipating potential fissures, years ago family members established a way to redeem their shares through put rights — in other words, vote with their feet.
“Theoretically, a Goldman Family Branch who objected to the direction taken by management could, over the course of a generation, fully liquidate its position,” the lawsuit explained.
But the suit alleges that Jane set herself up to manipulate the required appraisals by hiring Newmark — a firm biased in her favor, the plaintiffs argue, because Jane had used it for other work.
Newmark’s preliminary appraisal valued the portfolio at about $2.6 billion. But a series of reductions brought that figure down by $558 million. Those discounts are central to the dispute.
The appraisal, for instance, assumed the portfolio would be sold to a single buyer, which would fetch an estimated 15 percent less than if the properties were broken up and sold to multiple investors.
The appraisal also discounted the value because the properties pay above average management fees to Solil. Steven’s lawsuit says Newmark never saw any agreement saying that a new buyer would be bound to those contracts, and he doesn’t believe the requirement exists.
The assessment also didn’t consider properties near each other as pieces of assemblages, which would have increased their value.
In their fight over the family fortune, Amy and Steven spare no feelings, painting a severe and unflattering picture of Jane’s character.
Her “deep-seated sense of entitlement is matched only by her paranoia,” the lawsuit notes in a rhetorical flourish. It says Jane spends her days watching live feeds of the company’s employees through a high-tech surveillance system resembling something from a casino floor.
Amy and Steven allege that Jane runs the company with a “death grip” and has used company resources to renovate her home and her son’s apartment, while refusing to allow company employees to assist other family members.
They cite employee testimonials that Jane is a “micro manager” with an “unpredictable temper.”
A spokesperson for Jane declined to address the claims, and she has not yet responded in court.
Jane has been described by Forbes as the only female billionaire in the country running a real estate firm, but the lawsuit questions her business acumen.
“Jane is willing to tout the success of the business — control of which she has seized — when it suits her interests,” yet the Newmark appraisal paints a sobering picture of SGI’s value, the lawsuit says.
“While the broader New York real estate market has experienced a massive boom over the past decades, the business, under Jane’s control, has barely kept pace with inflation,” it says. “Either Jane’s management resulted in the business utterly stagnating despite favorable market forces or the appraisal was improperly deflated to advance another agenda — undermining the value of the SGI members’ interests.”