August 4, 2020

Fishkin Lucks Wins Investor Suit in New York County Commercial Division

Fishkin Lucks obtained summary judgment on behalf of its client, an investor, in a lawsuit to recover its significant investment with a real estate crowdfunding firm in connection with the development of The Standard Hotel in Chicago.  The Firm’s client had agreed to make its investment on the condition that, under certain circumstances, the crowdfunding firm would redeem that investment with an 18 percent pre-tax annual compounded return.  Although the Firm’s client made a proper redemption request, the crowdfunding firm refused to honor that request, purportedly on the basis of language in the documents governing the investment permitting it to “suspended dealings.”  The Firm moved for summary judgment, arguing that by the plain terms of the investment documents a suspension of dealings required that all—not just some—dealings be suspended, and it was undisputed that the crowdfunding firm was still engaging in some dealings when it declined the redemption request.  The Court agreed with the Firm’s argument and determined that it was entitled to recoup its full investment plus the promised interest. The Court likewise rejected the crowdfunding firm’s competing motion for summary judgment, through which it argued that it could selectively suspend dealings.