N.J. lawsuit: Zygi and Mark Wilf await the price they must pay

  • Article by: MIKE KASZUBA , Star Tribune
  • Updated: August 23, 2013 - 9:49 AM

New Jersey judge Deanne Wilson found Vikings owners guilty in a long and bitter lawsuit. Now she must decide their penalty – and worth.

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From left, Zygi, Mark and Leonard Wilf listened to a New Jersery judge’s decision Aug. 5 in a 21-year-old lawsuit.

Photo: ANDREW MILLER • For the (N.J.) Star-Ledger,

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– The latest drama over the Minnesota Vikings’ new $975 million football stadium can be found in an unlikely setting — a 186-year-old courthouse in New Jersey with creaky floors, a weathervane atop its roof and a small fifth-floor courtroom littered with documents and charts.

This is where Vikings owners Zygi and Mark Wilf have already been found guilty on civil charges of defrauding their partners over profits from a sprawling apartment complex that sits a short drive away. How much the Wilfs will have to pay in civil penalties, including punitive damages, is expected to be announced shortly, with a partial ruling possible as early as Friday.

For years, the case dragged on in relative anonymity until two weeks ago, when the judge decided that the Wilfs showed “bad faith and evil motive” in a case she said was unlike any she had ever seen in New Jersey. Her words quickly caught the attention of Gov. Mark Dayton, who said he worried whether the judge’s findings about the Wilfs’ business practices would have any bearing on their stadium dealings. With ground about to be broken on the project and hard questions being raised over the Wilfs’ credibility, officials in Minnesota ordered a review of the Vikings owners.

The still-unfolding New Jersey case could be pivotal to the Minnesota review. Superior Court Judge Deanne Wilson is expected to rule soon on whether the Wilfs’ net worth — which she will consider in awarding monetary damages — should be made public. While Zygi Wilf’s net worth was at one point estimated at $310 million by Sports Illustrated, the court documents could provide a far more specific figure.

This week, during an otherwise tedious discussion of management fees, there was a new glimpse of how far the Wilfs’ real estate holdings stretch. Wilson said court documents showed the Wilfs had 30,000 to 50,000 apartment units, more than 100 other properties, two hotels — one of them in Israel — and a charter airline. And of course, she said, they own the Vikings.

The suit, filed in 1992, has resulted in an estimated 1,600 separate court exhibits; the trial lasted 209 days; lawyers took court depositions from 56 people, and Zygi Wilf himself was on the witness stand for 33 days. The high stakes are reinforced just by estimates of the attorney fees — a lead lawyer has asked for at least $5.2 million.

Most every day, Josef Halpern, who with co-plaintiff and sister Ada Reichmann want at least $50 million from the Wilfs, arrives in a motorized wheelchair accompanied by an attendant. Halpern sits to the side, wheezing and coughing as he struggles with ALS (Lou Gehrig’s disease). His attorney, Alan Lebensfeld, said Halpern was ambulatory two years ago, but now is “getting worse by the day.”

Halpern smiles occasionally, but has difficulty speaking.

Rachel Gardens, the disputed apartment complex, was named after Halpern’s wife, Lebensfeld said. Halpern is “the one who found the property and brought it to” the Wilfs, the attorney added.

Many of the case documents speak to an early history in which the Wilfs and the plaintiffs — and their families — were friendly business partners.

Loaded language

The Wilfs have not been in attendance recently to hear the judge list the reasons she thinks the Vikings owners committed fraud, breach of contract, breach of fiduciary duty and also violated New Jersey’s civil racketeering laws. Zygi and Mark Wilf sat quietly in the courtroom in early August when Wilson, in comments that made headlines from New Jersey to Minnesota, said that Zygi Wilf’s own testimony showed that he had “reneged” on the agreement with Reichmann because she got “too good a deal.”

For the most part, the Wilfs’ courtroom lawyers have lately had little to say — including whether the Wilfs will appeal the judge’s ruling.

“I really can’t go beyond [our] statement,” said Wilf lawyer Shep Guryan. The Wilfs have been in business for 58 years, he said earlier, and “as with many businesses, disputes occasionally arise.”

Lester Bagley, the Vikings’ vice president of public affairs and stadium development, said that the case will have “zero impact” on the Wilfs’ ability to finance and operate the downtown Minneapolis stadium. Dayton said this week that he wants an “absolute, airtight guarantee’’ that the Wilfs can meet their financial obligations with the stadium; the Vikings are responsible for $477 million of the construction costs, which includes a $200 million loan from the NFL and revenue generated from stadium naming rights, sponsorships and licensing fees.

The setting hardly matches the high stakes. On most days, those gathered in Courtroom 16 are mostly lawyers. During a recess this week, one attorney jokingly asked Laurie Engemann, the court reporter who records every word spoken in the courtroom, if she was going to buy herself a diamond ring with earnings from the long-running case.

With accountants for both sides also in the courtroom, most of the hearings have delved into the minutiae of the real estate deal gone bad. “Do we have to call it a ‘scheme’?” Wilf lawyer Bruce Snyder interrupted, as a lawyer for Reichmann characterized the Wilfs’ actions. At other points this week, the lawyers also squabbled in front of the judge over using the words “concocted” and “stealing” in describing the Wilfs’ actions.

“I think ‘stealing’ is not a word that I have used,” the judge said.

But an attorney for Reichmann argued that the case did involve a theft. “To me, ‘stealing’ and ‘theft’ is the same thing,” he said.

  • related content

  • The Wilf business empire

    Thursday August 22, 2013

    A lawsuit in a New Jersey court could offer the clearest view of Minnesota Vikings owner Zygi Wilf’s holdings. Estimates...

  • Aug. 18: Wilf inquiry adds pressure to stadium timeline

    Sunday August 18, 2013

    Any delays caused by a review of his finances would ripple through the construction schedule.

  • Aug. 24: Vikings: 'No point' in negotiating stadium during Wilf probe

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    Minnesota Vikings execs say the MSFA 'needs to be fully confident in our ability to deliver financially.'

  • A partial ruling in the case could come as early as this week from Judge Deanne Wilson.

  • Co-plaintiff Josef Halpern is seeking at least $50 million from the Wilfs in a 21-year-old lawsuit over a New Jersey apartment complex business partnership.

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