Adam Leitman Bailey's Blog, page 4
February 16, 2024
February 7, 2024
Adam Leitman Bailey consulted as expert on legal issues for NBC News: Trump could soon face over $400 million in legal penalties. Can he afford it?
Former President Donald Trump says his brand alone is worth over $10 billion, but a pair of civil verdicts could cause financial havoc for him, legal experts said.
Trump was slapped last month with an $83 million award in the E. Jean Carroll defamation case and faces the prospect of another verdict in the coming days that could be multiples of that — while also dismantling parts of the company his wealth comes from.
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How much does Trump owe Carroll?Trump was hit with an $83.3 million verdict on Jan. 26 for repeatedly defaming Carroll and has said he plans to appeal as soon as possible. He’s already appealing a $5 million verdict Carroll won against him last year for sexual abuse and defamation.
Will Trump have to pay while he appeals?While the appeal could delay Carroll from collecting her money for years as it winds its way through the court process, it doesn’t stop Trump from having to come up with that cash — and then some. Under federal court rules, civil defendants have to post security for awards while they appeal, and in New York, that includes a 9% annual interest rate.
For the $5 million award, Trump had to deposit $5.5 million into a court fund — 111% of the judgment amount.
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What happens if Trump appeals?Trump has already said he would appeal if Engoron rules against him, but if he does, he would most likely still be on the hook for the full amount.
David Slarskey, a business litigation lawyer, said that New York state court, like federal court, requires security or a bond and that given the likely size of the award, Trump will probably move to get a bond.
If James gets the full $370 million she’s seeking, it could cost Trump up to an $18 million nonrefundable fee to the surety company. And with the 9% interest rate, the amount of money that would have to be put up would be in the $400 million range.
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Adam Leitman Bailey, a New York real estate attorney who has sued Trump before, said he would most likely have to put up 10% of the judgment in cash while using property as collateral for the remaining amount. “He’s running for president of the United States. He’s not going anywhere.”
Adam Leitman Bailey consulted as expert on legal issues for Associated Press: Key points from AP analysis of Trump’s New York civil fraud case
NEW YORK (AP) — Donald Trump could potentially have his real estate empire ordered “dissolved” for repeated misrepresentations on financial statements to lenders in violation of New York’s powerful anti-fraud law.
But an Associated Press analysis of nearly 70 years of similar cases showed Trump’s case stands apart: It’s the only big business found that was threatened with a shutdown without a showing of obvious victims and major losses.
Some legal experts worry if the New York judge goes ahead with such a penalty in a final ruling expected within the next couple of weeks, it could make it easier for courts to wipe out companies in the future.
“This sets a horrible precedent,” said Adam Leitman Bailey, a New York real estate lawyer who once sued a Trump condo building.
Adam Leitman Bailey consulted as expert on legal issues for The New York Sun’s Editorial: The Potentially Unprecedented Punishment of Trump
AN INVESTIGATION BY THE ASSOCIATED PRESS DISCLOSES NO — ZERO — PRECEDENT IN THIS STATE FOR WHAT NEW YORK’S ATTORNEY GENERAL WANTS DONE TO THE 45TH PRESIDENT.The extraordinary nature of the New York attorney general’s attempt to take away from President Trump the company he and his family built is well marked today by the Associated Press. Its review of “nearly 150 reported cases” of business fraud in New York since 1956 found that “nearly every previous time a company was taken away, victims and losses were key factors.” Yet even absent any victims or losses, Mr. Trump’s business could be “dissolved.”
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New York’s Executive Law 63(12) — that’s the one being used against Mr. Trump — requires only “repeated fraudulent or illegal acts” and not a showing of harm. Yet it appears as if that stipulation has been, as Shakespeare quipped, “more honored in the breach than the observance.” That is because the AP “found that victims and losses were factors when it came to deciding whether to take over a business.” Meaning, Mr. Trump would be an exception.
That’s something to keep in mind amid all the talk in the bien pensant salons about how no one is above the law. The question is: Why should Mr. Trump, or anyone, be below the law? We spoke to a real estate attorney, Adam Leitman Bailey. He has faced off with Mr. Trump in court — and, he tells us, bested Mr. Trump in a settlement. He calls the possibility of this punishment, though, a “travesty of justice” that “harms the fabric of our democracy.”
Mr. Leitman Bailey asserts that Executive Law 63(12) was “not made for this type of case. It is made for small-time criminals.” He surmises that Ms. James was motivated to pursue this path because she “hates Trump.” Mr. Leitman Bailey tells us that Ms. James eschewed charging Mr. Trump with a more conventional fraud statute because under 63(12) “You don’t need a victim or a showing of intent, or evidence of fraud. You just have to show up to win.”
Here, Mr. Leitman Bailey observes, “all money that was borrowed has been paid back” and “there have been no victims.” By choosing this statute, the attorney explains, Ms. James not only stacked the deck, she rigged the game. We wonder if this startling departure from precedent deters or drives the presiding judge, Arthur Engoron. He has promised a ruling by Wednesday. Mr. Trump’s antagonist, General James, seems in a hurry, too.
January 17, 2024
January 4, 2024
Mission Impossible: Securing Almost 2 Million Dollars From a Convicted Felon to Payoff Claims Owed to Commercial Lender
In the life of a title litigator, you want to be challenged and have interesting cases where you are asked to use your best skills to prevail. We were delighted to be told that this claim required the most aggressive, street-smart law firm on the Fortune 500 companies attorney list and we could not feel more proud. But we also must have been shell-shocked to be excited about trying to be heroes by collecting almost two million dollars from an unemployed convict with no savings and zero job prospects—or so that was what we were led to believe.
The Hunt Began
The title company had insured a commercial lender who had been swindled by a convict who had served jail time for theft and mortgage fraud, among other crimes.
Adam Leitman Bailey, P.C. was retained to seek recovery from a borrower, Adam Hochfelder, who had defaulted on loans obtained from a major commercial lender. Judgment was entered in 2008 for $1.76 million dollars.
Hochfelder, a highly successful real estate deal maker, was convicted of defrauding multiple lenders, including our client. The Supreme Court determined that he held a valid interest in half of a luxury apartment owned by Hochfelder’s then-wife, pledged as security for the client’s loans. The apartment is occupied under a life estate interest by Hochfelder’s former father-in-law.
After the assignment, Adam Leitman Bailey, P.C. did voluminous background research into Hochfelder’s activities and potential assets, including the issuance of thirty information subpoenas to Hochfelder’s employers, associate, and family and governmental entities. We coordinated with the Office of the New York County District Attorney regarding documents in Hochfelder’s criminal cases.
During a later asset investigation, Adam Leitman Bailey served an additional thirty information subpoenas and analyzed thousands of pages of evidence. Based on our findings, Adam Leitman Bailey, P.C. conducted investigative interviews and depositions of business associates, family members, and Hochfelder himself.
As a result of Adam Leitman Bailey, P.C.’s investigation and the pressure it exerted, Hochfelder sought to negotiate an agreement under which the client would have recovered $1.4 million. However, following Adam Leitman Bailey’s advice, the client instead directed Adam Leitman Bailey, P.C. to suspend its collection efforts and opted to wait for the termination of the life estate of Hochfelder’s former father-in-law.
His father-in-law’s health report, combined with his age, and Adam Leitman Bailey, P.C.’s ability to obtain numerous documents securing eventual title to the apartment worth more than the claim, made it the better decision for the lender monetarily.
Adam Leitman Bailey, P.C.’s exhaustive efforts in researching, investigating, and negotiating in the Hochfelder case played a crucial role in securing a potential recovery of $1.4 million. The decision to stand down collection efforts temporarily, as advised by Adam Leitman Bailey, aims to ensure an even higher monetary recovery for the client.
Adam Leitman Bailey, P.C. was represented by two former prosecutors led by Partner Colin Kaufman, a senior associate in the investigation phase of the case, and by both Adam Leitman Bailey and Colin Kaufman during litigation and negotiations.
Adam Leitman Bailey, P.C. was retained by the title company to seek recovery of any eventual payout to the commercial lender on a set of loans to the convict and his wife, on which they defaulted in 2007. Judgment was entered in 2008 for $1.76 million dollars. The last deposition between Adam Hochfelder and Adam Leitman Bailey occurred in early 2023.
Adam Leitman Bailey Files Lawsuit, Settles Emergency Case Providing Fortune 10 Company with Access to Repair Building While Accessing Neighbor’s Property
A call came in that a building in Brooklyn had pieces falling off of it and was in danger of harming persons using a parking facility below next door. In order to repair the building, protective equipment was needed to secure the building and the parking spaces next door. The neighbor had a price they wanted to allow access but could not agree on a number of other items. Because the parking facility was being actively used while pieces of the building continued to fall at a greater frequency and the repairs could not be done in poor weather, Adam Leitman Bailey, P.C. was thrown into emergency mode, immediately drafting an injunction, Order to Show Cause and a memorandum of law asking for emergency access into the parking facility to do necessary repairs. Within days we were assigned a judge and a court date, however, we visited the clerk to obtain an earlier date as we worried about bodily harm or death to innocent customers.
Legally, the hardest part of the case is that we were asking for the ultimate relief in our emergency application. So, we also sued in the Complaint for Article 881 asking for formal access onto their property to make repairs.
Thanksgiving weekend we received the call. An attorney for the parking facility owners was ready to allow us access after reading our papers. That weekend we negotiated all of the terms we needed to have the time and space to fix our building while having enough access so our job was not impeded by the amount of room we needed and the number of weeks, hours, and extensions when desired.
By Monday morning we had distributed a settlement agreement to our clients and then our adversary. Before our court date, we had submitted a Settlement Agreement to the judge signed by both parties and by the end of the week, our client had been working to repair the building.
Adam Leitman Bailey and Brandon M. Zlotnick drafted the papers for this case.
Adam Leitman Bailey, P.C. Prevails Defending Former Cooperative Board Members in a Defamation Action Using Amended Anti-SLAPP Statutes
In response to an action filed by a coop corporation against a former board member and one of its shareholders alleging that the defendants had defamed Board members by distributing newsletters and emails anonymously accusing the Board members of dishonesty and fraudulent conduct, one of the defendants moved to dismiss the complaint pursuant to New York Civil Rights Law § 70(a) and § 76(a), commonly known as a strategic lawsuit against public participation or SLAPP suit, as amended on November 10, 2020 (the “2020 Amendment”). The defendant argued that the 2020 Amendment should be applied retroactively and that the defamation action was a SLAPP suit intended to inhibit the shareholder’s rights of free speech, petition, and association rights in the cooperative corporation.
The 2020 Amendment 76(a) significantly expanded the applicability of the statute and extended it to cover almost all modes of public communication, construed broadly. The amended statute broadened the definition of an “action involving public petition and participation” from one brought by a “public applicant or permittee” to “any communication in a place open to the public or a public forum in connection with an issue of public interest.” The amended statute also made an award of legal fees mandatory, rather than discretionary, and provided for other compensatory and punitive damages not available under the existing statute.
Adam Leitman Bailey P.C. opposed the motion, arguing that the 2020 Amendment should not be applied retroactively to the pending action on the grounds that the text of the 2020 Amendments fails to explicitly state or clearly indicate that the law should be applied retroactively. Where there is no specific pronouncement of retroactivity in the text of the legislation, the presumption against retroactivity should apply.
The Court agreed with Adam Leitman Bailey P.C. and denied the Defendant’s motion, holding that the 2020 Amendment should not be given retroactive effect and therefore would not apply to the instant action. The Defendant appealed.
While the appeal was pending, the Court of Appeals in the seminal case on this issue Gottwald v. Sebert, 2023 WL 3959051 (June 13, 2023) issued a decision holding that the 2020 Amendment would not have a retroactive effect to apply to actions commenced before its effective date. The Court addressed the issue of
Whether the 2020 Amendments to the anti-SLAPP statute applied to the litigation, engaged in a comprehensive analysis of the statute and held it should not be applied retroactively. However, the Court went further and held that the 2020 Amendment would apply to actions that were “continued” after the effective date of the amendment and that if the Defendant prevailed it would be entitled to recover legal fees incurred in defense of the defamation action to the extent they were incurred after the effective date.
Bonnie Reid Berkow, a partner at Adam Leitman Bailey, P.C. in the Coop/Condo Litigation Group represented the Coop Corporation in this matter.
Bonnie Reid BerkowAdam Leitman Bailey, P.C. Quickly Secures Victory for Lender Facing Adverse Possession Claim
Adam Leitman Bailey, P.C. was recently retained by a title company to represent a Lender’s interest in an adverse possession action in Queens. The Lender had commenced an action to foreclose a mortgage against the subject property which resulted in an auction taking place. However, before the closing of the sale could take place, a tenant of the subject property commenced an adverse possession action. As a result of the adverse possession action, there was a cloud on title, and the lender and purchaser could not close on the auction sale.
The tenant made meritless and incoherent claims of adverse possession, contending that mere lawful residency and employment on the property for the statutory time period qualified them to adversely possess the subject premises.
Once retained, and against the urgency of needing to close of the foreclosure sale, Adam Leitman Bailey, P.C. immediately moved for joinder under CPLR § 1001(a) and § 1002 on the grounds that any judgment would significantly impact the Lender’s secured interest as the mortgagee. Adam Leitman Bailey, P.C. concurrently moved to dismiss the Complaint on behalf of the Lender under CPLR § 3211(a)(1), § 3211(a)(3), and § 3211(a)(7).
In the joinder motion, Adam Leitman Bailey, P.C. argued that the Lender must be joined as a necessary party because it held a mortgage secured by the Property that was subject to the adverse possession claim. Any judgment would directly impact the Lender’s ability to recover on its mortgage. Adam Leitman Bailey, P.C. further argued that the Lender had commenced a foreclosure action that had proceeded to a foreclosure auction, but Plaintiff’s adverse claim created a stain on title that prevented closing on the Property. Consequently, the Lender’s inclusion in this action was vital to protect its interests.
In the motion to dismiss, Adam Leitman Bailey, P.C.presented several legal arguments on behalf of the Lender. Adam Leitman Bailey, P.C. argued that: (i) the Complaint should be dismissed because a corporation must be represented by counsel and Plaintiff filed pro se; (ii) Plaintiff failed to meet the claim of right requirement for adverse possession under the 2008 amendments by showing a reasonable basis for its belief in ownership; and (iii) Adam Leitman Bailey, P.C. pointed to the recorded ACRIS documents establishing Plaintiff was on notice of the true owner and the Lender’s first mortgage lien.
Adam Leitman Bailey, P.C. researched and analyzed the legislative history regarding the 2008 changes to New York’s adverse possession laws. Adam Leitman Bailey, P.C. showed how the amendments heightened the claim of right standard for adverse possessors to have a reasonable basis for their claim of ownership. Furthermore, Adam Leitman Bailey, P.C. obtained and submitted copies of ACRIS records such as the deed, title report, and mortgage showing the defect in Plaintiff’s claim.
The Court fully adopted Adam Leitman Bailey, P.C.’s legal arguments made on behalf of the Lender and dismissed the Plaintiff’s Complaint in its entirety. By obtaining dismissal, Adam Leitman Bailey, P.C. protected the Lender’s mortgage lien secured by the Property and prevented any stains on the title as the Lender completed sale of the foreclosed Property.
Danny Ramrattan, Esq. at Adam Leitman Bailey, P.C. secured this result for its client.
January 2, 2024
Before Its Approval, Hochul Disarms Law to Unmask LLCs
BY MARK HALLUM DECEMBER 26, 2023 12:37 PM
New York Gov. Kathy Hochul signed a law to provide more transparency to limited liability companies in New York, but some critics say the law’s final iteration fritters away the opportunity for real accountability.
The lawmakers who originally pitched the LLC Transparency Act seem to be accepting the concessions made by the executive chamber. At least for now.
Now dubbed the LLC Disclosure Act, the bill requires beneficial owners of properties in New York state to provide their real names for a New York Department of State (DOS) database accessible only to law enforcement. However, Hochul’s office cut out the requirement to make the list available to the public at large.
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Celebrities and victims of domestic violence would likely be vulnerable to stalkers and others with personal grievances if the database was made publicly available, real estate attorney Adam Leitman Bailey told Commercial Observer in July.
“[The legislation] does not apply to S corporations, which gives another outlet to persons starting a business and wanting to bypass the LLC Transparency Act,” Bailey told CO in an email Wednesday.
