A state Supreme Court docket decide dominated towards the co-founders of a boutique New York City-based brokerage in an early check of the allegations pitting the executives against their investors.
Decide Joel Cohen ordered Casa Blanca CEO Hannah Bomze and COO Erez Zarur to offer their traders full entry to the corporate’s monetary information and pay $1.3 million into the court docket. If Bomze and Zarur, who’re married, fail to pay that quantity, Casa Blanca has the fitting to place a lien for that quantity on their newly bought house.
The choice got here in response to a request for a preliminary injunction from traders Samuel Ben-Avraham and Christian Visdomini of their lawsuit towards Bomze and Zarur.
Ben-Avraham mentioned in a press release that the choice “speaks for itself” and “reinforces the significance of transparency, correct governance, and fiduciary accountability.”
After the order was issued, Bomze and Zarur filed a discover that they are going to be interesting the ruling.
“We anticipate that enforcement of the Order might be stayed and that the Appellate Division will reverse the decrease court docket’s resolution,” an legal professional for Bomze and Zarur mentioned in a press release, including that the order will not be “a last willpower on the deserves of the dispute” and the court docket “has made no discovering of fraud or wrongdoing of any sort.”
“I’m absolutely targeted on defending the enterprise,” Bomze mentioned in a press release, including that the go well with got here as “highly effective monetary traders at the moment are engaged in predatory assaults and defamatory smears, trying to take management of a thriving firm by any means essential, though they’ve by no means labored right here or met a single agent.”
Contained in the dispute
What started as a dispute over commissions has devolved right into a battle over the administration of the corporate between its unique founding companions.
The 2 sides traded lawsuits final yr after Bomze initially alleged that she had earned $2.5 million in commissions, of which she was nonetheless owed $1.2 million. The traders countered by claiming that Bomze falsified paperwork to help her claims and had improperly paid herself $1.3 million from firm funds to cowl a part of her alleged fee claims. In addition they claimed that Zarur wouldn’t present entry to the corporate’s monetary information.
In his ruling, Cohen sided with a lot of the arguments made by Ben-Avraham and Visdomini, saying the reduction they had been looking for was essential to guard “the pursuits of the corporate and its stakeholders.”
Bomze and Zarur are additionally restrained from utilizing firm funds with out written approval to pay Bomze any of the commissions she claims she is owed or any compensation past what’s contractually obligated. In December, the board — which is made up of the 4 members on this case, with Ben-Avraham as a deciding vote — voted to take away Zarur as an officer of the corporate, a choice the court docket upheld.
Earlier than the order goes into impact, the 2 sides nonetheless should hash out how a lot cash Ben-Avraham and Visdomini should put up as a bond to cowl potential damages if it’s later decided that the injunction was improperly granted. Ben-Avraham and Visdomini’s lawyer put ahead $25,000; Bomze and Zarur’s legal professional is asking for $12 million.
Past the commissions Bomze claims she’s owed, Ben-Avraham and Visdomini have raised broader considerations of their authorized filings about how Bomze and Zarur’s alleged misappropriations have impacted the corporate’s long-term future.
“Allowing Ms. Bomze and Mr. Zarur to make any additional withdrawals creates a danger that the Firm might be left in a probably irreversible place,” the decide wrote in his resolution.
The findings
Bomze and Zarur launched Casa Blanca in 2019, backed by a $1.8 million funding from Ben-Avraham. The agency now counts over 200 brokers.
The arguments initially stemmed from Bomze’s declare that she is entitled to 100% of the gross sales commissions on transactions she dealt with personally from 2021 to 2025, which she alleged totaled $2.5 million, of which she had but to be paid $1.2 million. Bomze additionally receives a wage of roughly $365,000 and a 0.5 p.c bonus of all firm commissions.
Bomze has claimed that an unbiased dealer of file settlement signed in August 2019 exhibits that she is entitled to these commissions, whereas Ben-Avraham and Visdomini have claimed that Bomze and Zarur backdated the doc to offer deceptive help for her claims.
The decide famous that whereas it was “believable — although not but confirmed” that the doc was backdated, even when it was genuine, it’s seemingly unenforceable underneath the corporate’s working settlement that requires three-quarters of the corporate’s board to approve. It’s “undisputed” that the settlement was executed with out the information or approval of Ben-Avraham and Visdomini, Cohen wrote.
The traders additionally alleged that Bomze and Zarur breached their fiduciary responsibility by distributing cash to Bomze with out notifying them and through the use of firm funds for private bills. Cohen mentioned the previous argument is more likely to succeed, whereas he wrote that he had not but seen sufficient proof displaying Bomze and Zarur had used firm funds for private spending.
In a February listening to for the preliminary injunction, Bomze testified that she loaned roughly $2.5 million in commissions to Casa Blanca as one other argument for why she was owed that cash, however firm monetary information confirmed it was booked as income and revenue.
These figures had been later included in investor shows, which implies that if Bomze had lent the corporate cash, she and Zarur “seemingly can be liable for knowingly misrepresenting the Firm’s monetary situation to its Managers and to current and potential traders,” Cohen wrote.
