The sudden resignation of Douglas Elliman’s longtime chairman and CEO, billionaire Howard Lorber, was both a long time coming and a shock to many inside the company.
After two decades at the helm of the brokerage, Lorber was out. Executives and high-ranked employees were given maybe an hour’s notice of the announcement, sources told The Real Deal. Scott Durkin, president of the brokerage, was terminated three days later — without warning, his attorney said.
The announcements set off a chaotic image of the brokerage, which has been caught in differing accounts about the reasons for its abrupt housecleaning.
There’s likely more to come. CEO Michael Liebowitz told TRD in a statement the company was heading “in a different direction.”
“We are charting a new future,” Liebowitz said. “It is a new day at Douglas Elliman, it’s a departure from the past and a new generation of leadership.”
Company insiders were aware of an investigation of the company’s “sexually charged” work culture following the rape allegations against former Elliman star brokers Oren and Tal Alexander, the Wall Street Journal reported days after Durkin’s exit. The findings so far have led to Lorber’s exit, which the brokerage had previously referred to as his decision.
The Journal reported that Kennedy Lewis Investment Management co-founder David Chene pushed for the formation of a special committee to conduct the probe after his firm invested $50 million into Elliman under Lorber’s direction.
The investigation was handled by Robert Anello of the law firm Morvillo Abramowitz Grand Iason & Anello in the weeks leading up to last week’s sweeping changes, TRD has learned.
Anello did not respond to requests for comment. Elliman declined to comment.
Douglas Elliman’s statements after Lorber’s departure made no mention of an internal probe. In an SEC filing, the company stated that his departure was not a result of disagreements with Elliman. The lack of disclosure spawned a rumor that Lorber was facing a serious illness, but talk of that quickly disappeared.
To take Durkin’s place, Elliman promoted Richard Ferrari, previously its president and CEO of New York and the Northeast, to head its brokerage division, but said the executive would still manage sales in the tristate area and Washington, D.C., metropolitan region.
Mayhem at 575 Madison
Sources told TRD that Elliman hired the recruiting firm Spencer Stuart to find a new executive or executives and that all C-suite jobs are essentially on the table as Liebowitz looks to start fresh, sources say.
Recruiters for the agency approached other major brokerage firms in the days after Lorber’s exit, according to a person familiar with the process. The role they initially described was for a chief executive officer, sparking short-lived speculation that Liebowitz was temporary.
But a spokesperson for Elliman denied it hired Spencer Stuart to find a chief executive and said it had engaged the firm to find a chief technology officer. That search was to replace David Ballard exiting the firm effective Oct. 30, according to a Nov. 5 SEC filing.
Brokers and employees got their first brush with the newly appointed chief executive last week in a Q&A session with executive vice president and Chief Communications Officer Stephen Larkin. The wide-ranging conversation touched on his business experience and personal life, according to a recording obtained by TRD.
After some technical difficulties at the outset of the gathering, Liebowitz, prompted by Larkin, discussed his upbringing, his favorite restaurants, challenges facing the brokerage industry, and a mild case of glaucoma (his philanthropic efforts include the University of Miami’s Bascom Palmer Eye Institute). He said he splits his time between New York and Miami, spending six months and two days in Florida to maintain his residency there.
The new chief executive told the troops that company culture “starts at the top” and is not hard to change, yet also said, “Honestly, there’s no culture problem at Douglas Elliman.”
The event was part of a series of appearances to introduce Liebowitz to agents and staff, which Elliman said has garnered “tremendously positive feedback.”
Elliman’s headaches aren’t limited to the East Coast. In California, the firm is facing two lawsuits alleging it engineered kickbacks for select agents and rule-bending to the benefit of the Altman Brothers Team. Elliman denied the allegations and countersued.
“Over the next 30 to 45 days, we’re going to be coming out with more and more things,” Liebowitz said at the town hall. “You’re going to be seeing more hires at the executive level. You’re going to see more resources at the executive level, and we’re going to be playing offense every day.”
This article has been updated with news of Chief Technology Officer David Ballard’s departure, additional details around Liebowitz’s Q&A and comments from Liebowitz.
Sheridan Wall contributed reporting.
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