Beware of dabbling in the lives of the rich and related.
Families and millions don’t mix. It’s often a toxic combination that tears apart the ties that bind — a high stakes world where family dysfunction leads to wars over millions of dollars.
We’ve seen it with the Stronachs, the Leons, the McCains — family dynasties torn apart by inter-generational battles over wealth that invariably land in civil court and take years to settle.
And collateral damage can be the advisors who get caught up in the crossfire.
A branch of the reclusive Reichmann clan is in the midst of such a nasty family feud — Abraham Reichmann sued his elderly parents Ralph and Ada Reichmann for cutting off his cash infusions of about $40,000 a month after he launched his lawsuit against them in 2014.
According to Canadian Business, the Reichmann family ranks #42 in Canada’s richest 100 with a net worth of $2.33 billion.
Ralph is one of the three famous brothers, along with Albert and the late Paul, who spearheaded Olympia and York Developments into the largest property development firm in the world, building everything from Toronto’s First Canadian Place to New York’s World Financial Centre before having to declare bankruptcy in 1992 after the bottom fell out of the real estate market.
But it all began with Olympia Tile and Ralph remains president of the “multi-million dollar” family business.
And his son?
According to a 2015 interim court judgment in his favour, “Abraham is an ordained Rabbi, although at different times he has worked in the commercial world, including working at Olympia Tile and working with Ralph’s brothers on various business ventures such as the development of the Chase Tower in Chicago and a $1 billion sports entertainment complex for which Abraham was the President and Chief Operating Officer.
“Abraham has a wife, ten children, four daughters-in-law, and four grandchildren that are said to be dependent on Abraham for living expenses and all living in the family home.”
That’s a lot of dependents.
“For about 30 years,” the judgment continues, “Abraham received substantial amounts of money from his parents.”
Ontario Superior Court Justice Frank Newbould noted that in 2014 “payments to Abraham stopped for the reason, as acknowledged by Ralph, that he did not want to continue making payments that would be used to fund the litigation against him.”
Abraham wanted the judge to order his parents to reinstate his monthly cheques while the lawsuit continued, which he declined to do.
But Newbould did find “it was mean-spirited to say the least” that his father was giving cash advances from a family holding company to some of his children — $30,000 a month to a daughter, for example — but not to Abraham and ordered him to be reimbursed and treated the same as other shareholders.
While his suit against his parents continues, the son has now set his sights on the family’s accounting firm. He’s suing Zeifmans LLP and partner Ronald Rutman for a whopping $52.7 million, claiming they didn’t protect his interests.
According to the suit, Rutman has been acting for his parents since 1990 and was Abraham’s accountant from 1995 until Zeifmans claimed a “potential future conflict of interest” and dropped him as a client in 2014.
Reichmann said the firm should have declared a conflict from the start and advised him to seek independent advice. He said he counted on Rutman and Zeifmans as “not only advisors and accountants, but also friends” to protect his interests in the family businesses.
Instead, he alleges “they favoured the interests of Ralph and Ada above Abraham’s interests in giving advice and providing services.”
Reichmann also accused the accountants of working to “conceal’ or “deceive” him about his entitlements.
“The defendants failed to give Abraham competent, honest and diligent advice to Abraham, solely in Abraham’s interest and without any conflict,” the lawsuit claims.
None of the allegations have been tested in court.
No one from Zeifmans returned a request for comment, so it’s unclear if the defendants have entered their defense to claim.
Source:: Toronto Sun – Movies