Vikings owner Zygi Wilf.
Glen Stubbe, Star Tribune
Aug. 7: N.J. judge says Wilf cheated partners
- Article by: Mike Kaszuba
- Star Tribune
- August 7, 2013 - 7:00 AM
A New Jersey real estate case involving Minnesota Vikings owner Zygi Wilf — and the judge’s critical comments of the Wilf family’s business practices — is casting a new light on the National Football League team owner.
The Vikings and the Wilf family had little to say Tuesday after a New Jersey judge said Wilf’s own testimony in the long-running civil trial had shown that the Vikings’ principal owner had exhibited “bad faith and evil motive” in defrauding business partners in a large apartment complex project.
Superior Court Judge Deanne Wilson is expected to issue a formal ruling in the coming weeks, but she delivered a strongly worded courtroom rebuke of the Wilfs on Monday and said the family had not met the “barest minimum” of their responsibilities as business partners.
Although Vikings spokesman Lester Bagley on Tuesday referred to the civil dispute as a “private business matter,” the case at one point included allegations that the Wilfs diverted money from the project for “football related expenses” that were “incurred by the Wilfs in connection with their ownership of the Minnesota Vikings, and other NFL related activities.”
The Wilfs have large business holdings in the New Jersey area, but the family has long kept private its dealings. A 2011 Sports Illustrated study listed Zygi Wilf’s net worth at $310 million, placing him 27th among the NFL’s 32 owners, and the family’s private contribution to the Vikings’ new, nearly $1 billion stadium in downtown Minneapolis has been the subject of controversy.
But the court case, which dates to the early 1990s and received newspaper coverage in New Jersey, appeared to open a window into the Wilfs’ real estate dealings — at least with respect to Rachel Gardens, a 764-unit apartment complex in Montville, N.J. The judge said that Wilf, by his own “candid and credible” testimony, told the court that he felt business partner Ada Reichmann got “too good a deal” and that he “reneged” on an agreement made by his uncle Harry Wilf when Rachel Gardens was built in the 1980s.
The judge said she found that the Wilf family committed fraud, breach of contract and breach of fiduciary duty and had also violated New Jersey’s civil racketeering statute.
“I do not believe I have seen one single financial statement that is true and accurate,” the judge said in court. The plaintiffs, Reichmann and her brother Josef Halpern, claimed in court that they were owed $51 million. The plaintiffs had earlier argued that the Wilfs had used “organized crime-type activities” in their bookkeeping practices.
Newspaper coverage of the judge’s comments by the Star-Ledger of Newark on Monday showed Zygi Wilf and his brother, Mark, the president of the Vikings, sitting in the courtroom as the judge made her remarks. Wilson, who delayed her retirement to finish the case, said in court that “to my knowledge, there has never been a case like this in New Jersey jurisprudence.”
No comment from Wilfs
Shep Guryan, an attorney for the Wilfs, said the family would have no comment. “The Wilf family has been in business for 58 years and has earned a well-deserved reputation for integrity and honest dealings,” he said in a statement. “As with many businesses, disputes occasionally arise, and since we are currently in the midst of a legal process to resolve this civil lawsuit, we must decline [to make] further comment.”
Guryan had said earlier that Wilf had removed Reichmann from the partnership because she had not helped with construction costs, and Wilf, in court documents, said Reichmann’s financial help was no longer needed for the project.
In an early court hearing, Guryan argued that the Wilfs owed Reichmann just $430,000, while Halpern actually owed the Wilfs $6 million.
Alan Lebensfeld, Halpern’s attorney, said Tuesday that he was awaiting the judge’s formal ruling before commenting at length. “For the time being, all I will say is that the judge is in the process of correcting the wrongs which she has found were committed,” he said in an e-mail.
On Monday, Wilson said the Wilf family charged “grossly disproportionate management fees,” along with “unreasonable interest,” and inflated advertising costs to the partnership.
The judge said that Reichmann never received her 25 percent of the revenues and that Halpern did not get his 25 percent share after 1990. The two partners, the judge added, never received annual statements after 1989.
Partnership began in 1985
According to court documents, the Wilf family formed the partnership in 1985 with brothers Josef and Abe Halpern. Abe Halpern later transferred his interest in the project to Reichmann, a sister. Under the original agreement, according to court documents, the Wilfs contributed $500,000 to the project, the Halperns contributed another $500,000, and the Wilfs and the Halperns each owned 50 percent of the project.
But Guryan, the Wilfs’ attorney, had downplayed the legal acrimony.
The 20-year case, he said at one point, was “just another painful example of the attempt to get the Wilfs.”
Mike Kaszuba • 612-673-4388
© 2013 Star Tribune