From left: Rotem Rosen, Zina Sapir, Tamir Sapir, Bella Sapir, Elena Sapir, and Alex Sapir (Credit: Getty Images)
Rotem Rosen isn’t just seeking $103 million from the estate of Tamir Sapir.
To corroborate claims that he saved Sapir’s real estate empire from ruin during the financial crisis, Rosen’s legal filings paint a picture of a family unable to manage their finances without him.
Pointedly, he claims his former business partner and the late billionaire’s son, Alex Sapir, “mishandled and misused” assets from the elder Sapir’s estate — by making improper distributions to beneficiaries, hiding certain assets and investing in companies (on behalf of the estate) in which he holds an interest.
“Alex has taken numerous actions to benefit himself, his holdings, or specific Sapir family members at the expense of the Estate,” court documents claim.
But in what’s shaping up to be a family showdown, the estate and Alex Sapir are rejecting Rosen’s “fabricated” claims, which are based on “false or misleading allegations and omitted facts.”
In court filings, the estate said Rosen is simply seeking leverage in his divorce from Tamir’s daughter, Zina, whom he wed in 2007. Zina filed for divorce in April.
Beneficiaries of Sapir’s estate — including Zina and Tamir’s second wife Elena — have also sided with Alex Sapir. In a July 2019 court filing, Tamir’s adult children called Rosen’s accusations a sham.
Representatives for Rotem Rosen and the Sapir family declined to comment beyond the court filings. But Michael Ryan, a court-appointed guardian for Tamir Sapir’s young children, summed things up during a June 28 court appearance.
“Reading between the lines… the real parties in interest here are [Zina] Sapir and Rotem Rosen,” he said, according to a transcript of the proceeding. “It’s really a divorce battle fought on a different field.”
Roots in the financial crisis
The basis of Rosen’s claim is an agreement Tamir Sapir struck with his son and Rosen in the throes of the financial crisis.
A few years after marrying Zina Sapir in 2007, Rosen joined his new brother-in-law Alex in business. In 2011, Rosen and Alex Sapir formed ASRR LLC, a 50-50 venture, to help save the family from financial ruin. “Even Tamir’s personal credit card was restricted,” Rosen’s attorneys said in court documents. In a 2009 court filing in Nevada, Alex Sapir “pleaded poverty,” stating the Sapir Group was more than $250 million in debt and had just $4,000 in cash and cash equivalents. In 2010, Sapir defaulted on the mortgage and mezzanine loan at 100 Church, which SL Green bought at auction for a “ridiculously low amount of $10,000.”
Rosen claims in court documents that Tamir Sapir agreed to pay ASRR 10 percent of the net value of any restructuring deal it facilitated. Rosen admits that he was paid while the elder Sapir was alive and, to a “limited extent” after his death in 2014. For instance, he was paid $75 million for helping to restructure the Sapir Organization’s debt, including HSBC loans valued at $180 million.
11 Madison Avenue (Credit: Google Maps)
But Rosen said he was not compensated for some of the more lucrative deals — including the repositioning and selling of 50 Murray, 53 Park Place and 11 Madison, which SL Green bought for $2.6 billion in 2015.
In court documents, Rosen alleges that while Alex Sapir initially said the estate would pay Rosen and ASRR for that work, after a “falling-out between Alex and Rosen in 2017, followed by a separation of certain of their business ventures in 2018, Alex backtracked.”
However, documents filed on behalf of the estate allege there is no written agreement for the work and payment Rosen claims he’s owed. As a 50 percent owner of ASRR, Alex Sapir certainly would have known about one, court documents state.
What’s more, Rosen didn’t file a claim seeking payment until February 2019, which the filing points out, a divorce with Zina was imminent. Finally, the estate points out that Rosen failed to mention that until 2014, he was compensated for his role as CEO of the Sapir Org. In that capacity, he earned $600,000 a year and Zina Sapir was paid $11,600 weekly. “Rosen claims that ASRR is due compensation for the very same services for which he was personally compensated,” the filing stated.
Estate shenanigans
In an attempt to compel the estate to provide a full financial accounting, Rosen says Alex Sapir mishandled Tamir’s estate even before he died. According to court filings, Alex assumed power of attorney for his father when Tamir Sapir fell into a coma in February 2013, after suffering a heart attack and brain damage. Tamir Sapir died in September 2014, around which time his fortune reportedly shrunk from $2 billion to $600 million.
In court documents, Rosen posited that in paperwork preceding Tamir Sapir’s death certificate, Alex Sapir intentionally listed his father as divorced (even though he was married to Elena Sapir) to prevent Elena from claiming a portion of Sapir’s assets.
Rosen also said Alex Sapir made “improper distributions” to family members “with the goal of buying the silence of any beneficiary that might challenge his power over the Estate.”
Alex allegedly gave his mother and Tamir’s first wife, Bella, $25 million for a debt related to her 2006 divorce from Tamir. And he struck a deal to pay $750,000 to Tamir’s sister (Rozita Sofia), who previously threatened to sue Alex for violating his power of attorney for Tamir. Finally, he bought a $12.7 million townhouse for Elena Sapir, Tamir’s second wife, who lives there with their children, Eli and Zita Sapir.
According to Rosen, Sapir failed to disclose some of his father’s assets to the court — including Tamir’s jewelry collection, a wine collection that was stored at Rosen’s apartment at 250 Mercer, and Tamir’s collectible Ford Motor cars, which are now housed at Bella Sapir’s Hamptons home.
In a June 2019 court filing, Alex Sapir categorically denied Rosen’s allegations. He said there was no intentional concealment of assets from the asset. And he offered a simple explanation for the townhouse purchase: that he used his discretion to buy the home for Elena, whom Tamir Sapir supported financially while he was alive.
“This point is reinforced,” court filings state, “by the fact that none of the beneficiaries — who are all fully familiar with the administration of the Estate — is seeking an accounting or removal” of Sapir as executor.
Self-dealing
But among Rosen’s accusations, there is one with potential business implications: that Alex Sapir engaged in self-dealing, using the estate’s money for his own benefit.
In two instances — related to the Nomo Soho Hotel and Sapir’s Surfside development project — Rotem alleges that Alex Sapir obtained loans from the estate at favorable and/or below-market terms, benefitting Sapir Corp. At Surfside, Bella Sapir and Alex’s sister, Ruth Sapir-Barinstein, purchased two units for a total of $20 million. The suit alleges they also agreed to loan Sapir $3 million each.
The suit also claims that Alex Sapir bought out Rosen’s stake in their joint venture through a partnership owned by his half-brother and half-sister, both minors.
In court documents, Sapir said the allegations of self-dealing are “patently false.” He said Rosen set of carefully selected “facts” range from “misleading to plainly untrue.” Further, he said each transaction was “subject to commercially reasonable terms” made at arms-length and involving an audit committee. Each deal earned a “commercially reasonable return” for the estate.
Untangling Sapir’s estate
Settling Tamir Sapir’s complex estate has been a laborious, court filings for both parties reveal.
Although Rosen claims Alex made improper disbursements, Alex’s attorneys have cited the complexity of Tamir’s empire, which was comprised of at least 30 separate businesses and property in Manhattan, Mexico, Vermont and New Jersey.
They also said Sapir’s estate had been under audit by federal and state tax authorities since his death. In 2017, the IRS rejected Sapir’s valuation of certain properties and deductions, and suggested its value was $1.029 billion (about $500 million more than the estate claimed) and imposed $250 million in penalties. The estate whittled that down to $30 million and settled last year.
In court documents, he said the estate is solvent with more than $300 million in assets. But, court documents also state that Sapir is prepared to create and maintain a reserve fund with enough money to satisfy Rosen’s allegations. A full accounting of how Alex Sapir has handled the estate would be a “burdensome and costly” process with no benefit to the estate.
In addition, “numerous controversies” around Sapir’s beneficiaries will have come up, prompting each to lawyer up. Those lawyers have been meeting regularly for months to work out an amicable resolution.
“This Court should not permit Rosen, the soon to be ex-husband of Zina Sapir and now family outsider, to interfere with these objectives,” court documents state.