Herrick Sued for $1 Billion by Ex-Client Over Flubbed Deadline
Real estate investor Jacob Frydman claims the firm missed the chance to file critical experts' reports in a bitter dispute with his former business partner, Eli Verschleiser.
August 07, 2019 at 07:00 PM
3 minute read
A New York real estate investor sued Herrick Feinstein on Wednesday over claims that the firm missed key deadlines in his case against a business partner, seeking upwards of $1 billion in damages for alleged legal malpractice.
Jacob Frydman and companies United Realty Advisors and Prime United Holdings claimed Herrick bungled discovery in their federal racketeering lawsuit against Eli Verschleiser and others. Frydman said a report by a computer hacking expert and another expert’s $380 million damages estimate can’t be used at an upcoming trial because Herrick served them a month late.
“Herrick charged plaintiffs more than $100,000 … to assist in the preparation of the reports, in unsuccessfully opposing defendants’ motion to strike those experts’ reports and their testimony, and in objecting to [the] preclusion order,” the new suit says. “All of these legal fees were rendered useless as a result of Herrick’s malpractice in missing the court-ordered December 16, 2016 deadline.”
In the underlying suit, Frydman accused Vershleiser—who went in with him to sponsor a real estate investment trust in 2011—of hacking into United Realty’s computers, copying and deleting emails, stealing trade secrets and using information gleaned about Frydman’s business associates to defame him. He said the campaign of hacking and harassment continued for years. A trial is set for November.
The new suit claims that by failing to submit the damages and computer forensic reports on time, Herrick and its partner Arthur Jakoby committed malpractice and are liable for the entire sum Frydman and his companies had sought from the defendants—$380 million, trebled, and then some.
Herrick had previously said the expert witnesses were “essential” to make their case. Neal Brickman, who represents Frydman in both the underlying case against Vershleiser and the legal malpractice suit, told ALM, “we will attempt to prove our damages using lay witness, like the plaintiff, who can testify about projected revenue of the REIT and the loss of investor capital.”
“We believe the plaintiffs’ claims have no merit, and we will vigorously defend against them,” a representative for Herrick said in an email. Jakoby didn’t respond to comment requests.
U.S. District Judge John Koeltl’s description of the dispute between Frydman and Verschleiser as “long-running and acrimonious” is, if anything, understated. A 2018 article in the New York Post highlights Frydman’s allegations that Verschleiser beat him in an elevator, sought to have him photographed with prostitutes, and contemplated hiring thugs to inject him with LSD.
Not to be outdone, the Post reported that Vershleiser followed up with a suit claiming Frydman instigated the alleged elevator fight, chomped his finger “like a rabid dog” and bit his calf. The fight allegedly happened after Frydman was deposed at Vershleiser’s offices in a lawsuit over a real-estate deal.
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