Judge Dismisses Sapir’s Trade Secret Charge Against Rosen Brothers
The judge also ruled that Rosen’s default claim against Sapir can continue
A judge has dismissed the charges in a $100 million suit filed by Alex Sapir against his former partner and former brother-in-law Rotem Rosen, one of three ongoing cases between the two men, according to an order filed in the Southern District of New York on Thursday.
The judge also found in a separate opinion, filed Friday, that Sapir could be in default at two office properties, 260 and 261 Madison Avenue, where he is still entangled with Rosen, and that case will proceed.
In the first case, Sapir had alleged that Rosen, along with his brother Omer Rosen, had stolen proprietary documents when they worked for his family’s firm, The Sapir Organization. U.S. District Judge Ronnie Abrams dismissed those charges, and all remaining charges on jurisdictional grounds, allowing Sapir to proceed in state court or to amend the complaint.
In the second case, Rosen claimed that Sapir was in default at the two Madison Avenue properties, which served as collateral to an agreement the two had made in 2017.
Back when Rosen worked for The Sapir Organization, he and Sapir formed ASRR Capital, a fund that invested in property in Miami and New York, including the two Madison Avenue properties. The two had equal ownership, until they dissolved their partnership, and Sapir agreed to buy out Rosen’s portion in 2017 for roughly $75 million. Sapir made an initial $15 million down payment, with plans to pay out the remaining $60 million over 15 years, using the Madison Avenue properties as collateral.
Rosen claims that when Sapir refinanced the mezzanine debt on the Madison Avenue assets, it put him in default of their buyout agreement.
That depends on the interpretation of the agreement, and a judge found that both sides had reasonable arguments as to whether or not Sapir was in default, but that there were other issues at play, such as the fact that Sapir withheld information about the refinancing. “While far from a smoking gun, at this preliminary stage of the litigation, Defendants’ behavior supports a reasonable inference that they were concealing a refinancing default,” Abrams, the judge in both cases, wrote in an opinion.
Abrams dismissed several charges that Rosen had brought against Sapir regarding breach of contract and defamation, based on a press blitz that Sapir initiated when filing the above mentioned suit.
“Our clients are pleased with the Court’s decisions in both actions. The Court dismissed the bulk of Rotem Rosen’s claims with prejudice, including his baseless defamation claim while simultaneously allowing our clients to pursue their claims against both Rotem and Omer Rosen,” Terrence Oved of Oved & Oved, counsel for Sapir, said in a prepared statement. “The Sapir Organization looks forward to holding the Rosens accountable for their actions.”
“We are pleased with Judge Abrams’ well-reasoned decisions, dismissing Mr. Sapir’s frivolous lawsuit against the Rosen brothers, and allowing Mr. Rosen’s lawsuit seeking to hold Mr. Sapir and the guarantor 260-261 Madison Avenue accountable for their defaults and resulting damages to proceed,” Sheron Korpus, counsel for the Rosen brothers, said in a prepared statement.
Update: This story has been updated with additional comment from Oved & Oved, and additional explanation regarding the dismissal of the claims.