A New York state decide had some harsh phrases for a Nice Neck actual property scion who claimed he may take cash from his household’s enterprise to dwell as a “king or higher.”
Decide Joel Cohen lately issued a call after a trial in an 11-year authorized battle between Mark Harounian and his sister Mehrnaz Homapour over distributions and funds from the household’s Manhattan actual property portfolio.
Cohen stated Harounian “demonstrated a brash willingness to skirt state and federal legislation and repeatedly mislead state and federal authorities authorities, in addition to members of the family, each as to his earnings and within the conduct of his enterprise.”
The New York state decide awarded $16.5 million in damages to the household LLCs, through which Homapour holds a minority stake. Homapour had sought $48 million from Mark, however Cohen stated that quantity contained math errors.
The award will likely be lowered by a credit score given to Harounian for working the household enterprise equal to six % of gross rents for sure household LLCs managed from 2012 to 2022.
Homapour is owed a further $5.28 million in beforehand unpaid distributions from the household LLCs. Harounian has to authorize the funds.
Mark Harounian is the son of Jacob Harounian, who immigrated from Iran and made his fortune within the rug enterprise within the Seventies earlier than constructing his personal Manhattan actual property portfolio within the Eighties, made up primarily of multifamily walkups. Harounian the youthful took over administration of the household companies, whereas his sisters took a passive function. By 2014, the household managed about 30 Manhattan rental properties valued at $500 million.
Homapour sued her brother in 2015, alleging Harounian used the household actual property as a private piggy financial institution, shopping for Picassos, luxurious automobiles and holidays and paying for a number of mistresses. Homapour accused her brother of defrauding her into signing working agreements which allowed him to counterpoint himself.
However final 12 months the decide ruled that Homapour did not show fraud. An appellate courtroom reinstated the declare, permitting Homapour to carry the fraud declare to trial. On the trial, Cohen rejected the fraud declare, stating that Homapour did not show by clear and convincing proof that her brother tricked her into signing the working agreements.
Nonetheless, Cohen discovered that her brother diverted funds from his household actual property firms to pay for his way of life, together with funds tied to extramarital relationships, a bar mitzvah and private properties. Cohen stated he discovered Harounian “bracingly candid,” however generally evasive.
Cohen additionally discovered that Harounian engaged in a “blatant scheme” to get round lease laws by inflating invoices.
Harounian believed the cash he took from the household LLCs as his birthright as the one son of a “staunchly patriarchal father,” Cohen famous in his September resolution. Cohen stated the scion testified that he believed he may “take no matter he wanted to dwell his life,” and to take action, “as a king or higher.”
However Cohen stated that whereas cultural and familial practices could, partly, clarify Harounian’s conduct, “they don’t excuse disregarding the governing working agreements.”
“The Courtroom’s resolution made clear he was no king, his fiduciary duties weren’t a crown, and the household firms weren’t his kingdom,” stated Terrence and Darren Oved of Oved & Oved, who represented Homapour. “It is a victory not just for our consumer, however for each minority member in a intently held New York State entity.”
However Harounian’s legal professionals at Pryor Cashman recommended they have been on the successful aspect of the choice, noting that Cohen rejected the “plaintiff’s outrageous and unsupported calls for to rescind the working agreements.”
“The plaintiff doesn’t deserve any restoration, and the very modest award she did obtain is the results of errors and oversights elsewhere within the resolution, which we’ll tackle on enchantment,” stated William Charron of Pryor Cashman.
A judgment has not but been entered on the docket.
Mark Harounian has one other ongoing legal battle with his family. His father, Jacob, introduced a go well with in opposition to him in 2018, alleging his son had confessed to stealing $3 million in household funds.
“I had requested God to present me a superb son, however … I apparently made a mistake once I was asking God,” the patriarch stated via a Farsi translator at a 2024 listening to. “As a substitute of giving me a superb son, he gave me this man.”
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