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October 14, 2011 6:27 PM

Patterson Belknap Embroiled in Father-Son Litigation

Posted by Sara Randazzo

A New York real estate mogul's long-running feud with his father has worked its way into yet another round of litigation involving Patterson Belknap Webb & Tyler and one of the firm's former partners.

In a lawsuit filed Thursday in New York state court, Eric Hadar, his real estate investment firm Allied Partners, and his family trust accuse Patterson Belknap and former partner Clay Pierce (now a partner at Drinker Biddle & Reath) of breaching their ethical and fiduciary duties by assisting Hadar's father, Richard Hadar, in a so-called bad faith campaign against the younger Hadar and subsequently damaging his business and the family trust.

The suit also names as a defendant New Jersey attorney Michael Rosenbaum, a shareholder at Budd Larner who was involved in a series of earlier legal actions brought by Richard Hadar against his son.

A Kasowitz Benson Torres & Friedman team led by partner Michael Bowe is representing the plaintiffs in the suit, including Eric Hadar, who, according to the New York Post, first made a splash on the New York real estate scene in 2001 by paying $725 million for the Citigroup Center in midtown Manhattan and ultimately amassed a property portfolio worth $3 billion.

The current suit against Patterson Belknap, Pierce, and Rosenbaum revives counterclaims that Eric Hadar filed against the defendants in 2009 in response to a suit Richard Hadar brought against his son in New York state court.

A judge dismissed those counterclaims, saying they were brought improperly because the defendants Eric Hadar named were not the plaintiffs in the suit filed against him. At the time, Patterson Belknap argued in briefs filed with the court that the counterclaims should be dismissed not just on procedural grounds but also because they "are all without merit" and "are nothing more than an attempt to derail and shift attention from the original lawsuit." The Hadars eventually settled the underlying suit.

In a written statement, Bowe said his client decided to bring the new suit against his father's lawyers because "he believes their conduct was outrageous and he is pursuing those claims because they have significant value."

Bowe first encountered the Hadars in an adversarial role, suing both father and son in 2001 on behalf of Blue Chip Emerald, a firm made up of former Allied Partners members that successfully proved claims of fraud and breach of fiduciary duty against Allied. The younger Hadar later asked Bowe to represent him in the legal battles with his father.

Patterson partner Frederick Warder said the firm had no comment. Pierce and Rosenbaum did not respond to requests for comment.

The father-son fight started in full force in October 2008, when, according to the suit filed Thursday, Eric Hadar, "like many of those struggling with the illness of addiction, suffered from a relapse and was arrested for drug possession." According to the New York Post's account of the arrest, police pulled over Hadar's Lincoln Navigator when they saw him driving erratically on the Saw Mill River Parkway in Westchester County. When they searched the vehicle, they found more than 700 Oxycontin pills, several hundred tabs of Xanax, and about four ounces of cocaine. (Bowe said via e-mail Friday that the drug charges against Eric Hadar were "dismissed in their entirety." The Post reports that he was sentenced to one year of court-ordered supervision, which is scheduled to end in December.)

In the wake of the arrest, Richard Hadar attempted to take over the company through a series of legal actions while also seeking to block Eric Hadar's access to his two children and to interfere with a criminal case against him, according to the complaint filed Thursday.

Patterson Belknap was pulled into the fight when the elder Hadar hired the firm to represent the trusts of Eric and his brother Joshua, "but in reality to advance the interests of Richard Hadar to the detriment of both trusts," the complaint states. The firm then falsely accused Eric Hadar of mismanagement, self-dealing, financial impropriety, and other misconduct, the suit filed Thursday alleges.

Patterson attorneys and Rosenbaum later filed a series of lawsuits and legal actions against Eric Hadar, the complaint states, all in conflict with their apparent representation of the two estates.

The latest complaint by Eric Hadar seeks appropriate compensation for the damage to the plaintiffs' property interests and reputations. In addition to breach of fiduciary duty, the suit includes claims for civil conspiracy, defamation, malpractice, and malicious prosecution.

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