At 3 o’clock in the morning, half a dozen lawyers and clients sat around a large conference table in a prominent law firm. They were meeting to sign an agreement in principle to settle a years' long dispute over ownership rights in seventeen limited partnerships that owned shopping malls valued at more than $500 million dollars. As the ink began to dry, attorney Michael Bomstein reflected on the chain of events involved in the case that began with a phone call back in December, 2006.
At that time Mike had been contacted by an attorney in Florida who was searching for a Philadelphia lawyer with experience in litigating complicated real estate partnership disputes. The Florida attorney had been researching relevant cases and kept coming across Mike Bomstein’s name in various lawsuits. Finally, he contacted the Pinnola & Bomstein firm to introduce himself and lay out a challenge: Was Mike prepared to work with a team of lawyers to take on another potentially protracted, family partnership dispute?
The challenge was intriguing and Mike agreed to a telephone conference with Art, his prospective client. A successful real estate entrepreneur in his own right, Art had an operational base in Florida but also had substantial interests in Pennsylvania. The conference was short; Art introduced himself and asked Mike whether he would always let him know his honest opinion in the case, even if he had to express his disagreement. Mike assured him he would!
A short time later, Art called him back and told Mike that another attorney had an opinion on a particular issue and he wanted to know what Mike thought. Mike expressed polite disagreement with the other attorney’s views and was promptly hired on to the litigation team.
Art then explained the nature of the dispute. He and his brother Charlie were unable to agree with their brother Barry on management of the partnerships' many properties. They were no longer able to agree on management fees; distributions of profits; determination of cash reserves; and compensation of the management team for additional services.
With Mike's assistance, over the course of the next year forensic accountants were brought in to begin their investigation into the inner workings of the family partnerships. Slowly pealing away the layers, the accountants examined partnership books and records and began to get a handle on how the partnerships were being operated. By spring, 2008, however, the parties were still unable to resolve their differences.
With the assistance of local counsel, Art and Charlie filed a derivative action in late June, 2008. By that time, Mike Bomstein had been designated lead counsel for the plaintiffs. Among other things, the suit alleged that the parties had reached an impasse. Charlie and Art asked the Court both for damages and equitable relief. For his part, Barry insisted that he had done nothing improper and that, in fact, his overall course of conduct had benefitted both the partnerships and his brothers.
Art and Charlie asked the Court to grant them a preliminary injunction against their brother and, after five days of testimony, the trial judge entered a decree in their favor. The Court directed that Barry not use partnership funds for anything other than partnership purposes. The case then proceeded on track towards trial.
During more than a year of discovery and forensic investigation, Art and Charlie’s lawyers obtained and examined more than 140,000 documents relating to the operations of the partnerships. As the case drew closer to trial, counsel retained the services of an experienced mediator to help them resolve the case amicably. At the close of the first session, however, it appeared that no progress had been made and additional depositions were taken to get the case ready for trial. Yet, counsel did not give up and a marathon mediation session in July enabled the parties finally to resolve their differences on terms that were mutually acceptable.
When the dust settled on the parties’ agreement, Art and Charlie received assets (real estate and cash) valued at over $229,000,000. Moreover, with the assistance of Mike and the other lawyers on the team, they finally were able to extricate their partnership interests from their brother’s and safeguard their own.