Pilsen’s one-time largest landlord and property manager escalated his yearslong battle with his sister over the real estate portfolio their parents and grandparents assembled in the Chicago neighborhood, claiming he’s been shorted on a $4 million debt owed to him by a family trust.
A new lawsuit filed this month is the latest development in a bitter dispute between John Podmajersky III and Lisa Podmajersky over how much of the family’s holdings they are each entitled to control.
The family’s real estate portfolio consists of more than 100 buildings mainly situated in the East Pilsen arts corridor near Halsted and 18th streets; the siblings’ grandparents began buying area properties in the early 1900s. Their father, John Podmajersky Jr., increased the family’s holdings by acquiring and marketing lofts with the goal of creating an artists’ colony.
The new lawsuit filed by John III alleges that Lisa Podmajersky neglected her fiduciary duties as trustee of a special trust set up by their father, by not allocating a quarter of its assets to her brother. Attorneys for the siblings did not respond to requests for comment.
The family’s legal quarreling started in 2012 when their parents filed a lawsuit alleging that their son had been untruthful about the extent of his financial control over their properties through his eponymous property management company. The elder Podmajerskys sought to remove him as manager of their Pilsen buildings, according to local news reports.
Both parents died while the case was being litigated, in 2013 and 2014. Before their deaths, though, John Podmajersky Jr. had changed his will and made his daughter the properties’ owner.
In a counterclaim, John Podmajersky III alleged that his sister took advantage of their parents’ declining health to cut him out of their wills and seize control of the properties. The court ultimately sided with Lisa Podmajersky in early 2016, forcing the brother to turn over management of the properties to her new company.
Now, John Podmajersky III is citing the terms of a special trust their father established in December 2012, with Lisa as its current trustee.
Before the parents’ deaths, the special trust transferred some of John Podmajersky Jr.’s assets to his wife. The initial terms of that trust stated that those assets would be split evenly among his children, though he gave his wife authority to change that to allocate 75 percent of the trust’s assets to Lisa Podmajersky, and 25 percent to John Podmajersky III.
Those assets included 50,000 shares of JPodmajersky LLC, a company that John Podmajersky Jr. managed that his daughter became sole manager of after he died, as well as a bank account and an ownership interest in the loft apartments at 1801 South Peoria Street.
On the same day his father formed that trust, the now-deceased Podmajersky also borrowed $4 million from the son, with the debt set to mature in December 2021 and the son as the lender, the son said in his lawsuit. John Podmajersky Jr. never made the annual interest payment for the first year and died in October 2014, according to the suit.
An attorney for John Podmajersky III demanded payment last year. According to the lawsuit, an attorney for Lisa Podamjersky said the trusts did not have liquidity sufficient to make distributions to any beneficiary, a denial the lawsuit calls “wrongful, in bad faith or at a minimum grossly negligent.”
The lawsuit alleges that Lisa Podamjersky is taking a combined salary from the parents’ estate and trust of about $250,000 to manage the family’s properties and act as the estate’s executor, and that the properties generate “significant income.”
It was Lisa Podamjersky’s duty as heir to the estate and manager of the LLC to ensure that the trust’s debt to the son was paid, but she prioritized her own interest in retaining the money in the estate, his suit said.
“Lisa has a duty to eschew any conflict of interest in deciding whether to pursue collection of the promissory note from the estate,” the lawsuit states. “She failed to do so, and her divided loyalty has resulted in JPodamjersky failing to pursue a legitimate, slam dunk claim for breach of contract.”