Crain's New York - March 18, 2013 - (Page 4)

We congratulate our client IN THE MARKETS by Aaron Elstein daniel shapiro on the acquisition of 211 East 43rd Street New York, New York and financing with ‘Rabbi’ took unorthodox turn A decade ago, J. Ezra Merkin (above) was seen as a hedgefund manager with the golden touch. Because his funds posted steady gains year after year, no matter how crazy the markets got, over time he assembled a roster of clients made up of wealthy New Yorkers and nonprofits including Yeshiva University, the Harlem Children’s Zone, New York Law School and the Metropolitan Council on Jewish Poverty. He was the “Rabbi of Wall Street,” according to federal court documents. Want more info on our done deals? Scan the QR Code with your smart phone. Then it turned out the secret of his success was funneling his investors’ cash to Bernie Madoff. Last year, the disgraced fund manager agreed to settle a $410 million civil suit charging him with securities fraud filed by the New York state attorney general’s office, and next week a federal judge who needs to approve the deal will hold a hearing. There’s a potential glitch, though: The trustee for the victims of Mr.Madoff ’s historic fraud,Irving Picard, is seeking to block the settlement because he’s seeking $500 million from Mr. Merkin to repay another group of victims. Yet even if the judge signs off on the settlement with the attorney general, Mr. Merkin’s courtroom battles will be far from over.He must also face former friends and clients who have filed their own claims against him.They include an Israelbased foundation called Keren Matana, which earlier this month filed a suit in federal court seeking $1.5 million in recoveries and $5 million in punitive damages. Keren Matana found its way into this lions’ den through a board member named Benjamin Jesselson, the son of a prominent New York philanthropist and a friend of Mr. Merkin, whose family name graces Lincoln Center’s Merkin Concert Hall. (In court papers, Keren 301 Matana said it has been shut out from the $410 million settlement because Mr. Jesselson recovered the charity’s $1.5 million investment with Mr. Merkin via arbitration.) Mr. Merkin is now a defendant in at least six suits filed in federal court in Manhattan and another 10 in New York state court. In all, $1.2 billion invested with Mr. Merkin vanished when Mr. Madoff confessed to running a massive Ponzi scheme, according to the attorney general’s office. To help pay investors back, in 2009 Mr. Merkin sold his art collection, consisting of 15 works by Mark Rothko and Alberto Giacometti, for $310 million.The proceeds are held in escrow pending the judge’s approval of the settlement with the attorney general. Though Mr. Merkin has fallen unfathomably far in most people’s eyes, he retains his stature in certain circles. During the Jewish holiday of Purim last month, he appeared at the Fifth Avenue Synagogue, which was founded by his father and where he once served as president, to read from the story of Queen Esther. That is “a very high honor” for the institution to bestow, Keren Matana said in its suit. It’s a rather baffling one, too, considering the congregation’s members include several Madoff victims. Ⅲ THE NUMBER OF TIMES Jamie Dimon’s name is mentioned in the similarly numbered 301-page report released last week by the Senate Permanent Subcommittee on Investigations that looked into the $6.2 billion “London whale” loss at JPMorgan Chase. http://nyserda.ny.gov/energy-values http://nyserda.ny.gov/energy-values

Table of Contents for the Digital Edition of Crain's New York - March 18, 2013

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
OPINION
STEVE HINDY
GREG DAVID
REPORT: REAL ESTATE
real estate deals
THE LIST
FOR THE RECORD
CLASSIFIEDS
SMALL BUSINESS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crain's New York - March 18, 2013