Adam Leitman Bailey, P.C. Blocks Multimillion-Dollar Deal on an East Village Walk-Up Hours Before It Was Set to Close and Obtains Favorable Settlement for Client
After a respected Manhattan-based real estate investment firm discovered that its former vice president of acquisitions stole an investment opportunity to purchase an East Village walk-up that the employee was presented with during the scope of his employment, it turned to Adam Leitman Bailey, P.C. for assistance. Instead of presenting this business opportunity to Adam Leitman Bailey, P.C.’s client first, as he had a duty to do, the former executive decided to acquire the property for his own pecuniary interest by negotiating the purchase and sale through an entity that he controlled without ever notifying Adam Leitman Bailey, P.C.’s client. Under well-settled law, the employee owed a fiduciary duty to act faithfully and true to the obligations he had to Adam Leitman Bailey, P.C.’s client. As such, the employee had the responsibility to inform Adam Leitman Bailey, P.C.’s client’s principals when he first became aware of the property and of its availability for sale. The employee knew that his fiduciary duty to Adam Leitman Bailey, P.C.’s client precluded him from either negotiating or executing a contract to purchase the premises on behalf of some other entity. Accordingly, the employee’s negotiation and execution of the contract to purchase the premises on behalf of another entity, amounted to a breach of both his contractual obligations and his fiduciary duty to act faithfully and true in the performance of his contractual obligations to Adam Leitman Bailey, P.C.’s client.
Since Adam Leitman Bailey, P.C. did not have any information regarding the closing on the property, Adam Leitman Bailey, P.C. immediately brought an Order to Show Cause (“OSC”) application seeking a temporary restraining order to enjoin its former employee from moving forward with the purchase of the property. During the hearing on the client’s OSC application, Adam Leitman Bailey, P.C. learned that the parties were actually scheduled to close on the property in question the very next morning, in less than 24 hours from the hearing. Without any time to spare, Adam Leitman Bailey, P.C. successfully obtained a restraining order from the court on behalf of the client.
With the property potentially being encumbered indefinitely, together with the threat of future protracted litigation, Adam Leitman Bailey,P.C. succeeded in brokering a favorable settlement on behalf of the client.
Adam Leitman Bailey, P.C. attorneys Adam Leitman Bailey and John M. Desiderio handled the matter.