Arbor Realty Trust is off the hook for paying out a huge fee to the former best friend of its CEO’s son for helping arrange a massive Chicago apartments deal.
But the ruling in the New York-based lender’s favor is being appealed, despite the plaintiff allegedly skipping out on his attorney’s fees so far.
Judge Louis L. Nock of New York Supreme Court ruled in Arbor’s favor that tech investor Adam Cooper didn’t have the right to collect $1 million for his role in setting up the company to loan $417 million to Emerald Empire, the buyer of 7,500 apartments in Chicago from former landlord Pangea Properties.
Following New York-based Emerald’s deal in late 2022 to buy Chicago-based Pangea’s Chicago portfolio for a purported $600 million, Cooper last year sued Arbor, its CEO Ivan Kaufman and his son Maurice Kaufman, with whom Cooper had a close relationship, court documents show.
Cooper claimed he had made agreements over text messages and verbally with Arbor leadership that he would receive a fee for deals that Emerald made with the lender because he introduced Emerald’s CEO Moshe Wechsler to Maurice Kaufman.
Court records show Wechsler did several deals with Arbor, and Cooper indicated in text messages submitted to the court that Maurice Kaufman had agreed to pay Cooper on certain deals that didn’t involve a debt broker.
When Emerald went for the big one with Pangea, in which Arbor loaned hundreds of millions of dollars, Cooper got wrongly cut out, he claimed.
The deal between Emerald and Arbor that funded the acquisition from Pangea involved debt broker Meridian Capital Group, which the younger Kaufman claimed wasn’t set to make as large of a fee as Cooper initially demanded.
The judge found that there was never a formal contract between Cooper and Arbor and thus the lender didn’t have to pay out the $1 million Cooper requested.
The dispute damaged his friendship with the younger Kaufman, records show.
“The same way you think about this deal is the same way you think about the destruction of our friendship,” Cooper wrote to Maurice Kaufman, days before the Emerald Empire deal closed. “You think it’s all on me and I made up some story to ruin our relationship. It’s not on me. You’re a very stubborn person and only want to see your way. I tried to discuss a compromise and agree to disagree and try and save our relationship.”
The younger Kaufman grew annoyed with Cooper’s insistence on receiving fees.
“Literally stfu,” he wrote to Cooper. “You need to chill. Don’t talk to me like that.”
Arbor didn’t return a request for comment, and neither did a spokesperson for the lender, nor its attorneys. Cooper’s attorneys didn’t return requests for comment either. The judge ruled against Cooper last month, and Cooper has since appealed the decision, while Arbor has moved for a decision that it can collect its attorneys fees and expenses from Cooper.
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Cooper seems to be in a jam with his own legal fees, however.
His former legal team withdrew from the case earlier this week, citing Cooper’s “inability or unwillingness” to pay attorneys fees, records show. A different lawyer is representing him on the appeal.