Dispute Involving Related Real Estate Developers

Determination of value of multiple real estate projects in varying stages of development subject to dispute between first and second generation real estate developers.

This matter involved well known real estate developers.  The parties were related to each other and represented first and second generation operators.  The holdings were significant and included a variety of properties in varying stages of development.  One sibling wanted out – cash required to pursue his own path of development, separate from his uncle and other siblings.

Over a number of years the siblings had quarreled about how the business was run, but were able to continue to develop many projects.  The tension reached a point that the then current arrangement could no longer continue.  Legal Counsels were retained, allegations were made in writing and the tension continued to rise.  Options for possible resolution were discussed but common ground for a shareholder departure could not be found.

We were retained to assist on behalf of the departing partner.  We worked with real estate appraisers and planners to determine the value of the various entities our client owned a piece of – we considered stage of development, minority and lack of marketability discounts, co-owner and joint venture partner relationships and agreements, market conditions, income taxes and ongoing profits being earned as the dispute built even more litigious.  We also helped with the development of differing possible resolutions – asset swaps, project completions, open market sales, closed bids, parcel selections, internal auctions, etc.  Lastly we worked with internal and external accountants to devise a way to capture the ongoing value of the empire.  Our assignment was to calculate the value of the departing partner’s interests in the companies – we did this.

In the end, the parties could not resolve matters and a trial pursued.  Even though everyone involved thought they had a good plan to pursue, the Court ordered that based on the inability of the parties to get along at all, the only way forward was the liquidation of the business.