Schafer: In N.J., Wilfs' simple legal dispute goes haywire

  • Article by: LEE SCHAFER , Star Tribune
  • Updated: February 1, 2014 - 6:08 PM
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Vikings owners Zygi and Mark Wilf

Photo: Glen Stubbe, Star Tribune

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A quick Google search of “Zygi Wilf” with the word “evil” turns up a lot of hits, and for this permanent public relations wound Wilf can thank the Hon. Deanne Wilson of the Chancery Division of Superior Court in Morris County, N.J.

It was Judge Wilson who said in court last year that she found “evil motive” on the part of Wilf in his dealings with partners in a long-running dispute over an apartment project. She then decided against Zygi Wilf and his brother Mark and cousin Leonard, a decision that could cost them more than $100 million.

That case, parts of which have now been tried three times, is more than 21 years old and far from over. The Wilfs have appealed, and one of the things they will argue is that the judge just wasn’t very fair.

“Remember, the fight is about ‘Did I get all the money I think I am owed?’ ” said Peter Harvey, a former New Jersey attorney general who is quarterbacking the Wilfs’ appeal. “You’re not talking about life or death. Or injury to limb. You’re talking about a partnership that managed a single garden apartment complex.

“In that context, you have a judge making a comment about your former partner being evil? I mean, it’s extraordinary behavior. We think improper. And we don’t think the appellate court will like it.”

I did not like it much, either. The judge had her reasons, but she could have heard the evidence and decided the case against the Wilfs without using that kind of language.

Not that the Wilfs are all that easy to feel sorry for.

As principal owners of the Minnesota Vikings, the wealthy New Jersey real estate entrepreneurs long sought, and finally got, public financial support for a new stadium here.

An economic argument for this kind of public support is all but impossible to make, but the story of the Wilfs as thuggish bad guys no one here should ever have trusted wasn’t fully convincing, either.

When news of the New Jersey trial and the judge’s comments reached Minnesota, it just did not sound like any court case that could have been conducted around here.

Maybe the most remarkable part of the whole dispute is how simple it should have been to resolve, had the parties involved not been so committed to being right. The origins of the case, as outlined in a 2006 court decision, go back to the 1980s and the Wilfs’ plans for a project with some people they knew, Joe and Abe Halpern.

Abe had to borrow money from his sister, Ada Reichmann, and her husband, Ralph. This is normal family business stuff, except not that many people have a brother-in-law like Abe’s. Ralph was part of a family that founded what was once a global giant in real estate development, way up the food chain from the Wilfs.

Abe eventually assigned his interest in the apartment project to a company called Jarwick, which was created by Ralph for Ada Reichmann. Ralph told the Wilfs he stood ready to invest capital in the deal.

That day never came, and in early 1992 one of Ralph’s associates learned from Zygi Wilf that the partnership had borrowed money and wouldn’t need any help from the Reichmanns. Jarwick was out.

The Reichmanns didn’t like that and sued. They got a mixed outcome, as a court concluded that they did really own a piece but a separate trial concluded it wasn’t worth anything. The Reichmanns appealed.

The appellate court in 2006 decided that even if the equity wasn’t worth anything on the date Zygi effectively booted the Reichmanns, had they stayed in it eventually could’ve been. So the appellate court sent the case back to a trial court for an accounting.

It was the only thing the trial court was asked to do.

Instead, nearly seven years later and after 207 days of proceedings that included an additional plaintiff, new claims and Zygi on the stand for 28 days, the judge reached her spectacular conclusions.

This was no ordinary trial. In conversations I had with New Yorkers, the Jarwick vs. Wilf trial invited comparison to the famous, year-and-a-half-long Pizza Connection heroin smuggling trial. Back home, a Minneapolis litigator said she couldn’t think of anything even remotely like it.

There are conflicting accounts of just how many pages the recent trial record contains, as Harvey said it’s 26,000 pages and the judge once was quoted saying 28,000.

“Why such a lengthy trial proceeding is beyond me,” said Jim Cohen, a professor at the Fordham University School of Law in New York. “It sounds like the judge was unable to control the case. It’s hard, frankly, to think of another explanation.”

Cohen also said that a complex case may have a principal witness on the stand for a week or more, but he couldn’t explain how Zygi Wilf could have been asked to testify for 28 days.

Harvey has an explanation. It was harassment.

“It’s almost mind-boggling,” he said. “There is no witness that ought to be on the witness stand that long. There is nothing that you could learn from a witness that you can’t learn in five days. Absolutely nothing.”

The basis of the appeal is broader than just their complaints about the judge’s fairness. As for the judge’s response, a call to the courthouse in New Jersey revealed that the judge had retired and could not be reached.

“You can imagine one thing for sure,” Cohen said. “The appellate court will be unhappy looking at briefs based upon reading a 26,000-page transcript. Very unhappy.”

Any decision on the appeal appears to be at least two years away, and given the extraordinary trial, there seems to be a reasonable chance the appellate court will decide that some or all of it needs a reboot.

That could even mean that after 24 years two very wealthy families may still need a court’s help to decide what a minority interest in a single apartment deal should be worth.

That level of stubbornness and sheer cantankerousness isn’t particularly admirable. But it isn’t evil, either.

lee.schafer@startribune.com • 612-673-4302

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