Veteran real estate lawyer William “Bill” Ellis has joined Akerman LLP‘s Los Angeles office as a partner in the Real Estate Practice Group.

Ellis is former general counsel of global real estate conglomerate Reading International Inc. Prior to Reading, Ellis was a real estate partner at Sidley Austin, and he began his career at Morgan, Lewis and Bockius in Los Angeles.

“Bill is an industry veteran, who is known for his experience in complex real estate transactions for institutional investors and lenders,” said Richard Bezold, Real Estate Practice Group Chair. “He brings tremendous market knowledge in the hospitality and retail sectors, and adds important depth to our fast-growing practice in Los Angeles and across the region.”

In a release, the firm said Ellis has more than 30years of transactional real estate experience handling workouts and restructurings, leasing, acquisitions, dispositions, financings, joint ventures and developments across the United States. He works with private equity funds, global financial institutions, investment banks, real estate investment trusts, investment funds and private developers based both in New York and on the West Coast. He also has significant experience in corporate and securities transactions, including corporate mergers and acquisitions and initial public offerings.

Ellis previously served as general counsel and NASDAQ-listed Reading International Inc., the successor to Reading Railroad and now developer, owner and operator of retail and commercial real estate in Australia, New Zealand and the United States, including entertainment-themed retail centers, multiplex cinemas and live theater assets in Chicago and New York.

Photo by Jay Greinsky

Donald Trump’s campaign for the Republican presidential nomination rests on the notion, relentlessly promoted by the candidate himself, that his record of business deals has prepared him better than his rivals for running the country. But an examination of legal maneuvers around a 46-story luxury Trump condominium-hotel in Lower Manhattan provides a window into his handling of one such deal and finds that decisions on important matters like whom to become partners with and how to market the project led him into a thicket of litigation and controversy, writes Mike McIntire for The New York Times.

The buyers of some units asserted that they had been defrauded by inflated claims made by Trump, his children and others of brisk sales in the struggling project. Contrary to his claims that he rarely settles litigation, he and his co-defendants settled the case in November 2011, agreeing to refund 90 percent of $3.16 million in deposits, while admitting no wrongdoing.

A separate lawsuit claimed that Trump SoHo was developed with the undisclosed involvement of convicted felons and financing from questionable sources in Russia and Kazakhstan, the report states.

Read the article.

Morgan Stanley will pay a $2.6 billion penalty to resolve claims related to Morgan Stanley’s marketing, sale and issuance of residential mortgage-backed securities (RMBS), the Justice Department reported Thursday.

The settlement constitutes the largest component of the set of resolutions with Morgan Stanley entered by members of the RMBS Working Group, which have totaled approximately $5 billion. As part of the agreement, Morgan Stanley acknowledged in writing that it failed to disclose critical information to prospective investors about the quality of the mortgage loans underlying its RMBS and about its due diligence practices. Investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in RMBS issued by Morgan Stanley in 2006 and 2007.

“In today’s agreement, Morgan Stanley acknowledges it sold billions of dollars in subprime RMBS certificates in 2006 and 2007 while making false promises about the mortgage loans backing those certificates,” said Acting U.S. Attorney Brian J. Stretch of the Northern District of California. “Morgan Stanley touted the quality of the lenders with which it did business and the due diligence process it used to screen out bad loans.  All the while, Morgan Stanley knew that in reality, many of the loans backing its securities were toxic. Abuses in the mortgage-backed securities industry such as these helped bring about the most devastating financial crisis in our lifetime.  Our office is committed to dedicating the resources necessary to hold those who engage in such reckless actions responsible for their conduct.”

Read the announcement.

Wells Fargo has agreed to a $1.2 billion settlement to resolve a long-running mortgage dispute with the U.S. government, a move that slashes the bank’s 2015 profit by $134 million, reports The Charlotte News & Observer.

“The deal involves civil fraud claims brought in 2012 against the San Francisco-based bank, which the government had accused of ‘reckless’ underwriting practices that led to thousands of federally-insured loans defaulting,” according to the report. “The government said Wells Fargo’s false certifications that the loans met requirements for federal insurance resulted in hundreds of millions of dollars in insurance payouts.”

Read the article.

Sometimes rescission of a property purchase is better than suing for damages, which could limited to the difference between the price paid and the value of the property received, advises Khanh Tran on the blog of Continuing Education of the Bar ● California.

Although rescission makes particular sense when recouping the purchase price is more important than living in the house, it’s not always available, he writes. He advises checking to see if certain common grounds for rescission in the real property sales context apply.

Those grounds include mutual consent, mistake, fraud, failure of consideration, illegality and prejudice to public interest.

Read the article.

Donald Trump’s legal challenge to a planned offshore wind farm in Scotland has been rejected by the UK’s Supreme Court, reports the BBC.

The plan calls for 11 turbines off Aberdeen, close to Trump’s golfing development on the Aberdeenshire coast.

Trump’s organization said it was an “extremely unfortunate” ruling and it would “continue to fight” the wind farm proposal.

The broadcaster says that Trump “was furious when the Scottish government approved plans for the renewable energy development within sight of his multi-million pound golf development on the Menie estate, north of Aberdeen.”

Read the article.

A Dallas County jury has returned an actual damages verdict totaling more than $5.45 million in favor of local investment firms Gerritsen Beach Investments Ltd. and SSST Riviera Investments Ltd. after finding that Dallas-based Southwest Securities Inc. conspired to defraud investors and lenders out of millions of dollars between 2005 and 2010.

On Nov. 11, jurors in Judge Bonnie Lee Goldstein’s 44th Judicial District Court found that real estate developer Stephen Jemal conspired with Southwest to defraud the two Texas partnerships by misrepresenting the value of his Southwest holdings. The verdict also allows the plaintiffs to seek millions in attorneys’ fees, prejudgment interest, and costs, according to a release from the plaintiffs’ law firm.

“Mr. Jemal’s scheme relied on fake brokerage account statements that purported to show he owned tens of millions of dollars in blue chip stocks at Southwest,” says attorney Joel Reese of Dallas-based Reese Gordon Marketos LLP, who, along with partner Adam Sanderson, represented Gerritsen Beach and Riviera. “Lenders and investors, like our clients, relied on those fake statements, which were all tied to real accounts at Southwest.”

Trial evidence showed that Southwest provided easily altered brokerage statements that Jemal then used to deceive lenders and investors. Witnesses testified that Southwest assisted in the deception by lying about the value of the accounts, the firm reports.

“After five years of hard-fought litigation, our clients are pleased to finally receive justice,” says Reese. “Considering all the witness testimony and the incriminating documents, Southwest should have expected this result.”

Southwest recently was acquired by Dallas’ Hilltop Holdings Inc. and renamed as Hilltop Securities. The case is Gerritsen Beach Investments Ltd., et al. v. Southwest Securities Inc., et al., No. 10-10673.

Charles Sartain, writing in Gray Reed & McGraw’s Energy and the Law blog, uses a football metaphor to describe how a negotiating party could fail to score an enforceable contract while near the end of the negotiation process.

He describes a case involving the sale of a 2,232-acre Texas ranch and the sale of an oil and gas lease on the property. A broker agreed to sell the tract even though he didn’t have a brokerage agreement, and time was of the essence. During the process, the broker and the seller made offers and counteroffers about the commission and other benefits to the broker.

The appellate court found that a counteroffer operates as a rejection of the original offer, thus no agreement was reached.

Read the article.

MIAMI – The general counsel of Stiles, a developer in South Florida and elsewhere, will return to the private practice of law by joining Greenberg Traurig’s Fort Lauderdale office. Denny O’Shea, the incoming Fort Lauderdale Downtown Development Authority Chairman, will serve as chair of the firm’s Real Estate Development & Land Use Practice in Broward and Palm Beach counties. He is set to start in early October.

“When I wanted to get into the real estate development business in this region, I chose the best, with a great team culture and extraordinary leader in Terry Stiles. I of course know many law firms in the region from decades of working here and when I decided to now spend the rest of my career practicing law, I only turned to one firm, the best, Greenberg Traurig,” said O’Shea in a release.

“We recently decided to expand our leadership structure and I will become Executive Chair of the firm. While that job will involve overall strategy, international matters and shareholder compensation, among other things, I also intend to use this unique time in the Broward and Palm Beach markets to get back to my roots in local real estate development. When Denny called, it took me about 5 minutes to get incredibly excited about what we and the balance of our great team can now do together as we grow and area development heads north from Miami: his combination of real world experience, leadership talent and legal and business acumen is unmatched in this market, and the trust and friendship he engenders in literally everyone who knows him, are what make Denny a special guy I have long called my friend and now will be proud to call my partner,” said Richard A. Rosenbaum, Greenberg Traurig Chief Executive Officer. Rosenbaum has worked closely with O’Shea for over 25 years and spoke to his remarkable professionalism, integrity and character.

The release continues:

“Greenberg Traurig is a place I know well, and there is no one I trust more as a leader and friend than Richard Rosenbaum, who also understands the unique value we can deliver together in today’s market. We bring deep local knowledge and relationships built over many years as well as a collaborative firm’s network and experience in all the key US and global markets so important to this region: there is no other firm that offers this combination in Ft. Lauderdale and Palm Beach. And at this stage of my life, I frankly find Richard and Greenberg Traurig refreshingly ‘old school’: when he shakes your hand, you can bank it, the bureaucracy is virtually nonexistent, the focus is on the client, and the two of us have understood this real estate market for the last three decades,” said O’Shea.

O’Shea has been active in South Florida’s development community for 37 years, beginning his career in construction and developmental law. O’Shea has also served as Chair of the Economic Development Council of Broward County; the City of Ft. Lauderdale Unsafe Structures Board; and the Downtown Council of the Chamber of Commerce. As General Counsel for Stiles, O’Shea oversaw a staff of project managers and support personnel for the development of office, industrial and retail projects. He was responsible for project conceptualization, financial analysis, governmental approvals, architectural and construction coordination, and tenant lease up.

During his tenure at Stiles, O’Shea also previously served as the head of development. Before joining Stiles, a longtime firm client, in 1996, O’Shea was vice president of development for Broward County’s proposed Blockbuster Park development, working first for Wayne Huizinga, and then for Viacom, where he was responsible for selling the properties. Previously, he had been a partner in a well-respected Broward County real estate and land use law firm, and then became the head of development of the Florida division of what was then the largest homebuilder in the United States.

Terry Stiles, Chairman & Chief Executive Officer of Stiles, said, “When it comes to judgment, integrity, and trust, there is no one better than Denny O’Shea, with whom I have worked for a long time. I am in full agreement with his choice of firm for this next phase of his career and look forward to continuing to work with him.”

A Fort Lauderdale native, O’Shea studied economics at Harvard and also is a graduate of the University of Florida School of Law.

About Greenberg Traurig, LLP

Greenberg Traurig, LLP is an international, multi-practice law firm with approximately 1800 attorneys serving clients from 37 offices in the United States, Latin America, Europe, Asia, and the Middle East. The firm is among the 2015 BTI Brand Elite and among the most “Tech Savvy.” It was on the 2013-2015 BTI Client Service 30 listings of firms “most recognized by clients for providing excellent client service,” and one of the 2014 BTI Client Relationship Scorecard “Power Elite,” based on the nature and strength of its client relationships.

A New York court earlier this year explored the issue of disclosure obligations in “as-is” commercial transactions and came to an unexpected answer, writes DLP Piper’s Michael Hamilton in Commercial Property Executive.

The state appellate court ruled “that the seller of an apartment building in New York City had a duty to disclose certain facts about the building’s physical defects where those facts were not known to and not easily discovered by the buyer,” he writes. “The court found that the seller was obliged to provide those facts not only under its contract but also under common-law fraud doctrines.”

The case was TIAA Global Investments L.L.C. v. One Astoria Square L.L.C.

Read the article.

Matthew J. DeVries of Burr & Forman offers a few items to think about when drafting contracts, relying on a book titled “Courses on Drafting Contracts.” 

He quotes author and business attorney Peter Siviglia when he writes, “the contract will help define: (1) a transaction, such as the purchase of real estate; (2) a relationship, such as a partnership, or (3) a combination of both, such as a partnership to purchase and develop real estate.”

Other subjects include “A contract is a set of instructions,” and “A contract should include standard provisions.”

Read the article in Lexology.

Jackson Walker L.L.P. has added Lewis Kasner and Briggs Knight to the firm’s Houston office. Kasner and Knight join Alfie Meyerson, Thad Armstrong, David Jones, and David Robins, who moved from Thompson & Knight to Jackson Walker on April 20. In joining Jackson Walker, Kasner becomes a partner in the Real Estate group, while Mr. Knight joins as an associate.

The new additions add even further to the depth and distinction of Jackson Walker’s robust Real Estate and Finance practice groups, Jackson Walker said in a release.

“We are delighted to have Lewis and Briggs with us at Jackson Walker,” Meyerson said. “Keeping our team together was a key aspect to making this a successful move and a seamless transition for our clients.”

Real Estate practice leader Steve Martens agreed, stating, “To have such a strong, cohesive group join Jackson Walker is a boon to our firm and our clients. Lewis and Briggs are excellent lawyers whose practices are a perfect fit with ours. We couldn’t be happier to have them on board.”

With the new additions, Jackson Walker now boasts more than 50 attorneys who are dedicated to Real Estate law, making the firm’s group one of the largest and most experienced in the region.

Kasner has developed a reputation for providing clients with practical solutions based on his years of experience representing both lenders and borrowers in different types of transactions. He regularly represents financial institutions in both interim and permanent loan transactions of all sizes and complexity – ranging from $1,000,000 to $100,000,000. He also routinely represents commercial real estate owners and developers with the acquisition, disposition, and leasing of commercial property. Mr. Kasner is Board Certified in Commercial Real Estate Law by the Texas Board of Legal Specialization and was named a “Texas Rising Star” by Thomson Reuters in 2013-2015.

Knight focuses his practice on real estate and banking matters. He represents purchasers, owners, and developers in connection with a variety of types of improved and unimproved real property. Additionally, he represents lenders and borrowers in connection with loans secured by commercial real estate, such as retail, office, and multifamily projects, and middle market commercial loans. Mr. Knight’s real-world experience as an analyst in the commercial mortgage lending group at AIG Investments from 2006-2009 provides a depth of practical knowledge that is invaluable to clients. In addition, during law school, he served as a judicial intern to Judge David Hittner in the U.S. District Court for the Southern District of Texas in 2011.

Kasner and Knight join a growing number of lateral attorneys who have made the move to Jackson Walker over the last few years. The firm’s competitive platform and efficient cost-structure have proven highly attractive to Texas attorneys looking to both expand their practices and provide excellent service to existing clients, the firm said in the release.

Jackson Walker L.L.P. has 125 years of experience in providing legal counsel to clients throughout Texas, the United States and internationally. The firm provides a strong regional base of more than 350 attorneys in Austin, Dallas, Fort Worth, Houston, San Angelo, San Antonio and Texarkana.

Borrowing base reductions seem a certainty for many oil and gas producers, says a new white paper published by Haynes and Boone.

“While E&P companies continue to cut CAPEX and reduce overhead to conserve cash and look for ways to stretch their borrowing bases, many companies will opt for divesting non-core assets to pay down debt and improve liquidity, in order to survive until commodity prices improve.” the authors write. “The press is full of reports of investors on the sidelines eagerly evaluating opportunities to acquire oil and gas assets at the lower end of the price cycle. Buyers looking to take advantage of this opportunity may be able to save millions of dollars up front with a well-designed title due diligence plan in place prior to starting their transaction process. And, after acquiring the assets, the new owners will find fewer surprises down the road.”

Read the white paper.

As a part of its Homebuilder Series, Bilzin Sumberg has posted a free on-demand webinar that discusses protecting your company from misrepresentation claims through contractual exculpatory clauses.

This seminar discusses the case of Duggan, LLC v. Peacock Point, LLC, which held that under an “as is” contract containing disclaimers of warranty, a sophisticated purchaser is not entitled to recovery when the seller unintentionally misrepresented entitlements on the property.

Bilzin Sumberg litigation attorneys Mitch Widom and Wendy Polit are presenters in the webinar.

On its website, the firm says the webinar discusses the application of the Duggan decision to: i) the 2013 trial in Lennar v. Olivia’s Savannah, where the Second District Court of Appeals upheld the enforcement of the written contract against a purchaser who sued Lennar for negligent and fraudulent misrepresentations and ii) the potential benefits of the use of exculpatory clauses in purchase and sale contracts.

Watch the on-demand webinar.

American Realty Capital Properties Inc., the U.S. real estate investment trust reeling from reports of an accounting cover-up, was sued by a former executive who said she was fired for blowing the whistle on financial improprieties, reports Bloomberg News.

Lisa P. McAlister, ARCP’s former chief accounting officer, alleged that her October termination was in retaliation for her statements that changes in accounting practices were an attempt to hide the company’s faltering financial performance, according to a complaint filed today in New York state court in Manhattan. She didn’t cite any evidence beyond the allegation, Bloomberg says.

AR Capital said in a statement that McAlister’s lawsuit was without merit.

Read the story.

Nixon Peabody presents a free on-demand webinar covering the latest news from HUD with respect to “green” affordable housing development.

With sustainability issues continuing to emerge at the forefront of multifamily housing development, HUD is redoubling its efforts to ameliorate the 30% bite that energy takes out of its subsidy budget, the firm says on its website. How can sustainability efforts bring cost benefits that will outweigh the expense of implementation? Find out how you can capture opportunities for enhanced cash flow that you may be leaving on the table.

Topics will include:

• The latest news from HUD with respect to “green” affordable housing development
• How adding energy-saving measures to your project can be beneficial, and what these measures mean to you as an owner and to your housing portfolio
• How to execute a sustainable housing project through a case study example

Watch the on-demand webinar.

Haynes and Boone has posted the audio of a recent webinar on investing in real estate in Mexico.

The topics covered include CKDs (Capital Development Certificates) and Mexican REITs (FIBRAS) and how they have fueled the real estate market in Mexico; opportunities that these investment vehicles represent for domestic and international investors; legal developments impacting the real estate industry including constitutional reform on restrictions on foreign ownerships of land; and impact of structural reforms and government infrastructure plans on the real estate industry in Mexico (energy reform), including its impact on land ownership and on Agrarian laws (Ejido).

The moderator is Haynes and Boone partner Michael McCarthy. Panelists are Luis F. Moreno Trevino and Antonio Diez de Bonilla Martinez.

Listen to the recorded discussion.

Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan will present a free webinar on real estate litigation. The webinar will be Tuesday, Oct. 7, beginning at 1:30 p.m. Eastern time.

The firm says this session will focus on commercial real estate transactions and ways to avoid litigation by managing risk on the front end, with proper contract drafting or proper oversight of performances prior to the closing.

The webinar will examine how deals can go sideways due to actions and statements made by the parties, their brokers and their closing attorneys, resulting in changes to contractual rights and obligations that may be surprising to the parties. In addition, the presenter will look at what to do and not do if litigation is filed, and the risk of ancillary disputes arising out of the real estate litigation.

Register for the webinar.