Santa Monica Lookout
|Santa Monica Properties in Limbo as Developers' Legal Battle Continues||
By Jonathan Friedman
December 22, 2016 -- A real-life legal drama among heavyweights in the development world continues to unfold, and this has placed a big question mark on just who owns seven apartment buildings in Santa Monica.
A Court of Appeal panel this week placed a hold on rulings issued by Los Angeles Superior Court Judge Suzanne Bruguera in the past month, pending its own review.
These rulings allege wrongdoings by NMS Properties, including forgery and perjury, and perhaps more importantly order that NMS cede control of nine properties, including seven in Santa Monica, to Boston-based AEW ("Court Dispute Between Developers Spills into Santa Monica City Council Chambers," December 2, 2016).
To further complicate the matter, AEW has since sold the disputed properties to a Bay Area firm, according to various media reports.
NMS properties welcomed the news of the Court of Appeal's order as a first step toward victory.
"We remain confident that when all the facts come out, the courts will ultimately find that our properties were improperly transferred by AEW," NMS spokesman Eric Rose said in a statement.
The Lookout contacted an AEW spokesman, but did not receive a response. AEW attorney James Fogelman presented a much different picture of the situation than Rose did to the Los Angeles Business Journal, according to that newspaper.
The stay "will have no impact either on the sale of the properties last month or on NMS' appeal from the judgment entered against it," The Journal quoted Fogelman as saying.
The dispute between NMS and AEW dates back to 2014 when NMS CEO Shekhter alleged violations of a joint-venture agreement and that he was owed $720 million.
Santa Monica officials can't do much to get involved with the specifics of this battle, but they also have not been standing by quietly.
At the request of Councilmembers Kevin McKeown and Sue Himmelrich, the City Council earlier this month ordered City staff to look into all its dealings with NMS (“Santa Monica Council Orders Review of NMS Holdings,” December 8, 2016).
McKeown told The Lookout before the meeting that although he had no indication there was information in NMS' agreements with the City, it's "only prudent for us now to review all those documents."
NMS' Rose said the review will show "we have always operated with the highest integrity."
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