Grubb & Ellis Brokers To Appeal Company’s Sale To BGC
A team of Grubb & Ellis brokers who had fought to make the sale of the bankrupt company contigent on their ability to recoup millions of dollars of commissions they are owed is appealing today’s sale in bankruptcy court of the company to BGC Partners.
Stephen Meister, an attorney and principal of the firm Meister Seelig & Fein, said that he would act as co-council for eight Grubb & Ellis brokers in their appeal, a group that includes his son Jason Meister.
“We’re appealing this unfortunate decision by the bankruptcy court,” Mr. Meister told The Commercial Observer. “I’ve been engaged as co-council to appeal this in Federal Bankruptcy Court and hopefully reverse the decision so we can get brokers the commissions they are owed.”
More than 700 brokers and employees at Grubb & Ellis protested when the company issued notices two weeks ago that it would seek to sever payments that it owes to employees. BGC offered to pay brokers their commissions in the form of a loan that would be forgiven after a period of time, but some brokers at Grubb & Ellis balked that the commissions should be paid to them whether or not they remain with the firm under BGC because it was money they earned.
The sale of Grubb & Ellis to BGC, the company’s senior debt holder, was initially expected to conclude last Thursday, but was held up until today over the issue of commission payments. Attorney Andrew Glenn, who represented the eight brokers team during the bankruptcy hearings, argued that the brokerage payments were placed in a constructive trust, a type of holding structure where legal precedents exist allowing brokers to claw back their commissions even after a bankruptcy sale.
Besides Jason Meister, the brokers Mr. Glenn and now Mr. Meister represents includes Vin Carrega, Jon Epstein, Yoav Olsner, Charles Kinglsey, Michael Gottlieb, Howard Grufferman and Martin Conttingham, a group who are considered among the company’s top producing executives.
Arguing before Judge Martin Glenn, Mr. Glenn, who is not related to the judge, said that his clients are owed over $3 million. During Thursday’s session, Mr. Glenn didn’t protest the sale but said that Grubb & Ellis’s obligation to pay shouldn’t be wiped clean through the bankruptcy, a caveat that would have allowed the brokers to then sue BGC for their money once the sale was approved.
In a decision issued this morning, Judge Glenn rejected the notion that the commissions were held in a constructive trust and permitted the sale to go through free and clear of any debts. In the decision, Judge Glenn said that the commissions were essentially receivables owed to Grubb & Ellis that BGC has the right to acquire as part of its purchase of the company and divvy out as it sees fit.
Stephen Meister disagreed that the commissions were Grubb & Elliss’s money, stating that in appeal he would show the court that the payments are handed to brokers within 24 to 48 hours of receiving the commissions, an indication he said that the funds are the brokers’.
Mr. Meister said that he would handle the appeal with Mr. Glenn.
None of the Grubb & Ellis brokers involved in the suit could be reached for comment.