A rendering of 2901 Collins Avenue in Miami Beach and Jason Halpern
Jason Halpern’s silent partner in two Miami Beach deals just sued him, alleging Halpern exploited his role as manager and sold off property on Indian Creek Drive at a below-market price in a sweetheart deal to a colleague.
The suit, filed in New York Supreme Court, seeks at least $10 million in damages and to rescind the sale.
Investor Dhruv Piplani alleges in the suit that New York-based JMH Development’s Halpern “used his management position to withhold financial information from Piplani,” who largely funded the project at 2901 and 2911 Indian Creek Drive. “Then, abruptly, and without Piplani’s knowledge or permission — and seizing on Piplani’s travel to India in the wake of his mother’s passing — Halpern stripped the project of its sole asset, selling off prime real property in a sweetheart deal to Gerard Longo, a long-time business colleague of Halpern who had previously colluded with Halpern against Piplani.”
The suit filed by Piplani’s investment entities against Halpern and his corporate entities, further alleges that Halpern told Piplani he was delaying development of the Indian Creek properties due to market conditions, when in reality it was “to set the stage for the rest of the plan,” to remove Piplani and his entity from the property to give it to Longo for a secret quid pro quo.”
Brooklyn-based Longo bought 2901 and 2911 Indian Creek Drive in January for $7.75 million. According to the suit, Halpern had refused Piplani’s earlier offer of $9 million in November 2016.
“The only plausible explanation for Halpern rejecting Piplani’s vastly superior $9 million all-cash offer,” the suit alleges, is that Halpern had struck a “secret side deal with Longo, under which Halpern will become re-involved with the Indian Creek project or otherwise be kicked back benefits from the eventual development and resale” or for benefits connected to another project.
Responding to the suit, JMH Development said in a statement that it “has fulfilled all obligations” related to its partnership with Piplani’s entity on 2901 Indian Creek Drive. “The inaccuracy of these claims is extremely serious and we will respond with the facts in court,” the statement says.
According to the suit, Piplani was also a major investor in Three Hundred Collins, a 19-unit condo project currently under construction in Miami Beach’s South-of-Fifth neighborhood. The suit alleges that in that deal, Halpern “not only failed to fulfill his managerial and financial obligations, but adding insult to injury, demanded that Piplani make payments to meet capital calls for the project,” in violation of the operating agreement, while refusing to make mandated distributions to Piplani, as part of “a scheme to strip away Piplani’s interests in yet another property.”
The suit further alleges that Halpern sold Longo a unit at Three Hundred Collins, requiring only a 10 percent deposit rather than the standard 50 percent, and asking a Piplani entity to fund the remaining 40 percent. Several months after Piplani confronted Halpern about the arrangement, Halpern and Longo agreed to raise the deposit to the required amount, the suit says.
Additional allegations in the lawsuit relate to Halpern creating a development budget without Piplani’s consent, violating an approved development budget for Three Hundred Collins by making improper capital calls, providing financing or capital without proper notice, improperly distributing funds, failing to pay arrangement fees and failing to provide financial documents.
Bill Fried, an attorney with Herrick, Feinstein LLP in New York who represents Halpern and his entities, told The Real Deal that the allegations regarding both the Indian Creek and Three Hundred Collins properties lack merit. “The inaccuracy of the claims is very serious and we will respond with the true facts in court,” he said.
Piplani’s LinkedIn page says he is a partner and managing director of equity trading at Goldman Sachs in Hong Kong. However, Bloomberg reported in late 2014 that Pipliani resigned from Brevan Howard Capital Management, a European hedge fund, a year after joining the firm. Bloomberg said that prior to that he was with Goldman Sachs, and had been named one of its youngest partners four years earlier, at 29. An attachment to the suit says Piplani lives outside of the United States.
In addition to demanding at least $10 million in damages and to rescind the sale of the Indian Creek property, the suit seeks to restore Pipliani’s membership and management rights in that property, to create a trust with Halpern’s “ill-begotten gains,” and to prevent Halpern from dissipating assets from the Three Hundred Collins project.
Three Hundred Collins, at 295 Collins Avenue, topped off late last year, at 80 percent pre-sold, with units priced from $1.7 million to more than $9 million. Halpern’s JMH Development’s only other remaining property in South Florida is at 8995 Collins Avenue in Surfside, which the firm purchased in November 2015 in a $55 million bulk acquisition of a condo building. Plans are to develop a new luxury residential tower on the site.