A family real estate dispute in New York ended in a conference by a judge.
Brothers Aron and Michael Rosenberg have been locked in a legal battle for years over their real estate.
Aron, owner of R&B Realty Group, alleged Michael owed hundreds of thousands of dollars in unpaid rent on a warehouse the family owned in New Jersey. Michael, in turn, alleged that Aron owed money for selling the warehouse and not paying Michael his share of the proceeds.
But a New Jersey judge didn’t believe Michael’s arguments. The judge said Michael contradicted himself and gave an inconsistent and self-serving interpretation of what happened.
“Given all the evidence, his version of events is simply not reasonable,” Judge John Hudak said in his decision.
The saga began in 2001, when the Rosenberg family formed Daron Realty, which purchased Rahway’s warehouse.
Aron’s role was two-fold: he was managing partner of Daron Realty and president of Daron Fashions, a fashion company. Daron Fashions rented warehouse space from Daron Realty and had to pay monthly rent to cover the mortgage and other carrying costs.
Michael also worked in retail. He was part of Daron Fashions and started the menswear company Zee in 2008. By 2014 Aron had pulled out of Daron Fashions and asked Michael to take on a bigger role in the business. Two years later, Aron allowed Michael to store Zee’s merchandise in the warehouse.
Zee had to pay monthly rent to Daron Fashions amounting to half the cost of the space, including the mortgage and shared warehouse employees.
At the end of 2017, Daron Fashions ceased operations. Aron asked Michael to sell the remaining merchandise in the warehouse. In January 2018, Daron Realty began invoicing Zee for $29,493 per month. In late September, Aron sent Michael a severance notice and said Micahel owed 10 months’ rent – $294,934.
The following year they sold the warehouse. This too has been disputed.
Michael held a 20% stake in the company that owned the property. Prior to the sale, she received a foreclosure notice from TD Bank, forcing Daron Realty to issue a call for funds. Daron asked his members for a total of $3.6 million.
Other family members then contributed money, but Michael did not. Based on the terms of the operating agreement, its interest was diluted. Michael, however, went to court, insisting he owed 20% of the $9 million sale price, regardless of dilution.
The judge didn’t buy it, dismissing Michael’s claims with prejudice and awarding Aron $294,934.
“The court finds that Michael breached his fiduciary duty to Daron Realty by placing his personal interest above that of other members of Daron,” the judge said.
“The ruling validates our position that there was no wrongdoing on our part and sets the record straight,” Aron Rosenberg said in a statement. The real deal.
Her brother’s attorney did not immediately return a request for comment.
Aron Rosenberg’s RB real estate group has properties in New York and Florida. Most notably, he owns the Miami Gateway office building in Wynwood, which has approximately 195,000 square feet of Class A space.