The sale of Grubb & Ellis didn’t proceed as planned this evening when the judge hearing the case in bankruptcy court in Lower Manhattan delayed handing the company to suitor BGC Partners over arguments involving commission payments owed to the company’s brokers.
After jousting with Grubb & Ellis’s junior creditors and brokers, Judge Martin Glenn adjorned the court at around 6:30, three and a half hours after the session began.
Hope of a sale ended when Andrew Glenn, an attorney representing a prominent New York brokerage team at Grubb & Ellis asked that BGC’s acquisition be contingent on the creation of an escrow account that would hold millions of dollars in owed commissions so that Grubb & Ellis brokers can continue to fight for their money in court after the sale.
Both Grubb & Ellis and BGC’s attorneys in the case argued that BGC should inherit the right to control Grubb & Ellis’s commissions by virtue of its planned acquisition of the company, an assertion that Judge Glenn appeared to favor but in the end, after persistent arguing by Andrew Glenn, said warranted another day of deliberation before a final decision.
“We don’t oppose the sale but we’re going to try to get the creation of the escrow account and then sue for our money,” Mr. Glenn told The Commercial Observer after the hearing.
Mr. Glenn, who is not related to Judge Glenn, represents an investment sales team that includes Vincent Carrega, Neil Helman, Jon Epstein, Charles Kingsley, Yoav Oelsner, Jason Meister, Michael Gottlieb and leasing brokers Howard Grufferman and Martin Cottingham. In court today, he said that the group is owed more than $3 million.
The sudden ending appeared to surprise many in the courtroom, including Jimmy Kuhn, a top executive at Newmark Knight Frank, the real estate services firm that BGC acquired last year and is planning to integrate with Grubb & Ellis.
“I don’t have any comment,” was all Mr. Kuhn would say after the proceeding while consulting with lawyers and advisors.
Michael Lehrman, a high level executive at Cantor Fitzgerald, which used to be the parent company of BGC and whose chief executive Howard Lutnick is also the head of BGC, was also in attendance and seemed taken aback by the postponement. Mr. Lehrman said he was also unable to comment.
BGC has been trying to acquire Grubb & Ellis in bankruptcy court in an expedited process that is being employed to try to head off departures at the firm. According to BGC’s lawyers today, over 90 employees have left since Grubb & Ellis declared bankruptcy on February 20.