Town Residential founder Andrew Heiberger says partner Joseph Sitt has lobbed a series of “unreasonable” demands amid eleventh-hour negotiations for Sitt’s ownership stake, leaving the firm in limbo.
The deal for Heiberger to buy Sitt’s 50 percent stake in the company had been slated to close June 30. But it was delayed when the two could not agree upon terms before the July 4 holiday.
Meanwhile, operations at Town have come to a near standstill, sources said. There have been no meetings between management in weeks and Kristin Luciano, Town’s general counsel, resigned her position last week, sources said.
“While it was very disappointing that we did not close on June 30 as planned, I remain ready, willing and able to hopefully close this Tuesday despite the additional last minute financial and legal demands that have been made by Joe and his team,” Heiberger told The Real Deal. “The funds are in escrow ready to close.”
Among the alleged demands, Sitt submitted $831,000 worth of bills that were never on the books, some of which date back as far as 2012 and many of which were from Sitt’s own attorneys and consultancy firms, Heiberger claims.
A spokesperson for Sitt declined to comment.
The deal would mark the end of what many described as a tumultuous alliance. In 2014, a dispute between the two men over failure to meet financial targets resulted in dueling lawsuits. Sitt blamed Heiberger, terminating his contract as CEO. Heiberger contended that Sitt had passed on a deal to sell the company for a nine figure sum to real estate giant Savills, and therefore had only himself to blame for the failure to recoup his investment. More recently, the firm had been in talks to merge with Beverly Hills-based boutique brokerage The Agency but that deal fell apart.
Last month, Town’s former president of sales Wendy Maitland, a longtime Heiberger consigliere, filed suit against the firm, claiming Sitt had been starving it of financial resources. Sitt denied the allegations.
Heiberger first announced his intention to buy Sitt’s stake earlier this month in an email to company employees, saying it would help the company move past the latest “wave of distractions.”
“It’s no secret that Joe Sitt and myself are in late stage negotiations whereby I will be buying Thor Equities’ stake in Town. So far our discussions have been amicable and both sides are in full agreement that this is in the best interest of Town. I am elated and extremely optimistic about the opportunities that lie ahead for us and cannot wait to share the news when the closing occurs.”
Sitt has been a partner in the brokerage since 2011, when he agreed to become the firm’s financial backer. Heiberger had launched Town one year earlier, predicting that it would become one of the city’s largest residential firms. The company was the seventh largest in Manhattan by number of agents as of last month, with 523 agents and $514.3 million worth of listings, according to TRD’s most recent ranking. Rumors have circulated for more than a year that Sitt was trying to unload his stake.