Prominent real estate investor Stanley Black is suing his business partner of 34 years, Robert Barth, claiming Barth defrauded him out of $8 million in a Beverly Hills mansion sale.
Black filed the explosive lawsuit Thursday in Los Angeles County Superior Court, alleging Barth concocted an elaborate scheme to siphon millions of dollars for himself through a maze of limited liability companies.
Black founded Beverly Hills-based Black Equities Group in 1985 along with his son Jack and brought Barth on board as CEO. The partners grew the firm into one of the country’s biggest commercial and residential real estate investors, with over 18 million square feet of property across the U.S.
However, the lawsuit charges would appear to strain, if not immediately destroy, their longtime partnership.
According to the complaint, Black says that he and Barth bought a mansion at 840 Greenway Drive in Beverly Hills for $17.1 million in 2017. The duo bought the mansion through a series of LLCs which Black manages and Barth holds interests in.
Black alleges that unbeknownst to him, Barth allegedly transferred the property deed from the original LLCs to Eastwind Financial, an LLC completely controlled by Barth and his family.
The deed transfer happened as Barth was negotiating a sale of the property with Eric Baker, an entrepreneur who founded ticket resale marketplaces StubHub and Viagogo, where he currently serves as chief executive. (Earlier this week, Viagogo agreed to acquire StubHub for $4 billion)
The Barth-controlled Eastwind Financial sold the property to Baker for $25 million. Black alleges that Barth then cooked the books and told Black the property sold for $16.9 million – pocketing the $8.1 million difference.
Black is suing Barth for the $8.1 million plus interest, alleging breach of contract and breach of fiduciary duty. Black also alleges that Barth pocketed sundry other fees, including $235,000 Barth earmarked for property “due diligence.”
The Black Equities founder is also suing for punitive damages to “deter future malfeasance” from Barth.
Barth’s current role at Black Equities is unclear. The complaint makes no mention of the pair’s longtime business dealings or present relations. A representative at Black Equities said she didn’t know if Barth still worked for the company, and directed further inquiries to SB Management Corp. – a company Black and Barth founded in 1985, the same year Barth joined Black Equities.
Questions left for Barth at SB Management were not returned. A message left with Black including through his lawyer Howard King, of King, Holmes, Paterno & Soriano was not returned Tuesday. King is perhaps best known for representing celebrity musicians, including Robin Thicke, and artists suing Universal Music Group over master recordings allegedly destroyed in a 2008 fire.
Barth still lists himself as Black Equities’ CEO on his LinkedIn page. He is also co-founder of California Republic Bank, which merged with Mechanics Bank in 2016. He doesn’t appear to have yet appointed his own counsel, court records show.