Home The Firm Our Practice Our Professionals News K&S Blog Clients Resources Contact
Home | Clients
Case Histories

Cleaning Up a Mess

The tenant, a commercial taxi repair facility, spilled nearly 60,000 gallons of waste fuel oil underneath 11th Avenue, adjacent to the Jacob Javits Convention Center. The FBI and Coast Guard uncovered the spill and commenced a massive environmental clean-up on an adjacent, vacant piece of property. The tenant failed to notify the landlord that it was the source of the oil spill, and intentionally misled the landlord about the nature and extent of the environmental clean-up.

After four years of litigation, including a successful trial in Albany County against the tenant, and another two years of collection efforts against the tenant and its principal, Klein & Solomon was able to defend the property owner against a $1.3 million State clean-up lien and collect more than $1.1 million from the tenant to settle and resolve the State’s environmental claim.

The client-owner then decided to sell the property. After receiving an offer of $25,000,000, the property owner again consulted Klein & Solomon. Believing the offer to be below market for a prime development site, Klein & Solomon tapped its contacts and secured a better offer of $29,000,000, which ultimately closed.

Klein & Solomon’s consulting expertise in that case resulted in an additional 15% return for the owner. Our knowledge of the market and pro-active involvement in properly positioning valuable assets has enhanced the purchase prices for scores of clients. Whether in the purchase or sale of real property, we counsel and guide our clients through the marketplace to ensure they receive the very best value.

When a Famous Shoe Retailer Refused to Walk

Ferragamo, the posh shoe retailer, had announced plans to vacate its storefront space at 717 Fifth Avenue. But, six months after its scheduled departure, Ferragamo was still occupying the store – and unabashedly refusing to pay long overdue rent. The building’s owner, The Equitable Life Assurance Society of the United States, hired Klein & Solomon, which ultimately secured possession of the store and a $259,000 judgment against Ferragamo. The amount represented not only Ferragamo’s back-rent but also the property owner’s legal fees.

Room to Breathe

A long-time client was unable to pay its mortgage on a major commercial office building in Coney Island, Brooklyn. The client was both a part owner in the building and a major tenant.

Klein & Solomon immediately contacted the lender, Citigroup Inc., and negotiated a long-term standstill agreement that provided the client with more than a year to sell the property. Through continuous cooperation and communication with Citi executives, we delivered an extraordinarily long workout period to a client in distress.

We then acted as consultant to the client to secure the best purchase price possible. Using Ed Klein’s contacts in the real estate community, our client received multiple purchase offers from which a careful choice of the ultimate purchaser was made.

Klein & Solomon negotiated a market sales contract in the tens of millions of dollars together with a long term lease back to the client on fair terms. The property closed, the lease was put into effect, and the albatross was lifted from around the client’s neck.

Perseverance Pays

In 1990, National Foods, a division of ConAgra Foods, obtained a $200,000 judgment against a Manhattan businessman on a defaulted loan. The debtor thwarted National Foods’ efforts to collect the judgment, and the passage of time nearly rendered it unenforceable. In the eleventh hour, National Foods renewed the judgment, but its late filing subjected the judgment to challenge by the now bankrupt debtor and his other creditors. It looked as though National Foods would never collect a cent – until the company hired Klein & Solomon.

Thanks to our legal team’s decisive filings and extensive analysis of the debtor’s assets, the debtor was forced to convert his bankruptcy to Chapter 7 liquidation. Klein & Solomon marketed the debtor’s valuable Lower East Side property for public sale, attracting bids that significantly drove up the price. Negotiations with the bankruptcy trustee and other secured creditors culminated in a global settlement that divided the proceeds from the sale of the property.

Klein & Solomon secured $298,000 for National Foods, though there was significant interest still owed by the debtor.

Following the settlement, Klein & Solomon found that the debtor held an interest in a valuable property in Brooklyn. Klein & Solomon put together a group of creditors and forced a sale of the property, which sold at auction for $7.2 million, resulting in payment of 100 cents on the dollar on the National Foods claim, including all interest and counsel fees.

In the end, Klein & Solomon turned a dormant judgment into a half million dollar recovery for this very grateful client.

Orchestrating a Florida Foreclosure

Klein & Solomon's client, a limited liability company, purchased a Florida shopping center in an IRC Section 1031 tax free exchange. The only tenant at the property was P-W Food Chain, one of a chain of supermarkets throughout the Southeastern United States. P-W Food Chain filed for Chapter 11 bankruptcy relief in February, 2005, and closed 350 of its stores, including the Florida location.

Our client’s lender, Capital Crossing Bank of Boston, commenced foreclosure proceedings on the property even before P-W Food Chain vacated its space. The bank’s proceeding threatened any equity that the client built up in the property over a seven-year period.

Once a bona fide purchaser was found, Klein & Solomon set up a pre-packaged bankruptcy to provide the owner with the time necessary to sell the property while maximizing its value. It also gave the parties time to resolve creditors’ claims and litigation with P-W Food Chain, Capital Crossing and others.

The client put the ownership entity into bankruptcy, holding off the lender’s foreclosure proceeding. The property transfer closed, the lender was paid in full, and other creditor claims were resolved, all thanks to carefully orchestrated strategic planning – a typical result when clients trust their transactions to Klein & Solomon.

Turning a Case Around

When a commercial tenant in a landmark midtown building sued to recover alleged rent overcharges, the landlord retained Klein & Solomon. Later, when its lease expired, the subtenants, still in occupancy, failed to vacate the premises. Klein & Solomon quickly responded with a counterclaim for holdover damages.

Because of our legal analysis of the tenant’s case, the court was persuaded to dismiss the tenant’s overcharge claims and award the landlord twice the lease rental rate as holdover damages, plus legal fees and expenses. The landlord won nearly $1.2 million.

On appeal, the tenant claimed that extensive construction in the building during the holdover period interfered with its use of the premises. The Appellate Division was not convinced. Accepting Klein & Solomon’s counterarguments, the appellate court unanimously upheld the lower court’s decision.

This is a prime example of how Klein & Solomon can turn a case around. The tenant’s claim for rent overcharges turned into a substantial payday for the landlord.

K L E I N   &   S O L O M O N,  LLP
Clients Case histories Testimonials

© Klein & Solomon, LLP
Attorney advertising notice . Search . Contact . Site Map . Web Site Disclaimer and Notice
Stretch Ink