Activist hedge fund manager Barry Rosenstein is accustomed to purchasing stock in a company and then influencing management and the board of directors to make changes he feels will generate the best value. Now Rosenstein, founder of the hedge fund JANA Partners, is being accused of cutting out a real estate agent on the sale of the most expensive property in US history.
Corcoran real estate demanding $4.04 million in lost commission
The Corcoran real estate agency is demanding $4.04 million in lost commission and over $4 million in damages, claiming in a lawsuit claiming it was hired as the exclusive broker to sell the property, but was cut out of the $147 million deal, according to a report in the New York Post.
“[Corcoran] structured the deal and was awarded the listing three months before the sale, but was excluded from the transaction. [The defendants] proceeded nevertheless to willfully negotiate in secret for its sale with Rosenstein,” the lawsuit claims.
The suit claims Corcoran was selected by executors of the Estate after the owner had passed, and claims to have been the exclusive broker to market the property at a listing price of $150 million in January.
Rosenstein contacts Corcoran
Rosenstein contacted Corcoran and inquired about the estate, and communication took place between the Rosenstein and the real estate agent, Corcoran claims in their suit.
Corcoran says they ultimately brought a different buyer to the table willing to pay $155 million, but that Rosenstein negotiated directly with the sellers and closed the deal without their involvement.
In March, Rosenstein low-balled the sellers, offering $75 million, according to the report. He then raised the offer to $125 million. All the offers were refused, the suit says. The Rosenstein then allegedly told the sellers the price was too high, and he agreed to come closer to their ask price, eventually settling on $147 million.
The suit claimed that Rosenstein “conspired with the Estate representatives [to] avoid the brokerage fee .to secure a lower purchase price.” The suit says that in the ultimate contract to purchase the house between Rosenstein and the sellers, both parties acknowledged the potential real estate commission to be paid and indemnified each other.
“This dispute is between the sellers and a broker claiming to represent them,” a representative for Rosenstein was quoted as saying. “Mr. Rosenstein, as the buyer, should not be a party to the complaint, and we are confident the court will see it that way.”
A key point could be the potential lack of a standard broker’s agreement between Corcoran and the sellers. The suit says a copy of a New York Post article as well as an East Hampton Star article were included as exhibits to document Corcoran as the broker, but no brokerage contract appeared to be admitted into evidence.