Wilk Auslander, Serving as Co-Counsel, Obtains Trial Verdict on Behalf of Real Estate Developer Dismissing $75 Million Claim for Investment Management Fees

On July 19, 2019, New York's Commercial Division granted a judgment in favor of Panattoni  Development Company, a real estate development company, against a claim by private equity firm Hawkeye Partners, through its Scout Fund, for $75 million in investment management fees. After a seven-day bench trial, Justice O. Peter Sherwood of the New York County Supreme Court, Commercial Division, granted Panattoni a complete victory, finding that it was not liable to Hawkeye Partners / Scout Fund for any of the fees that were claimed.

In 2008, Panattoni formed a joint venture with private equity firm, Hawkeye Partners, to attract institutional real estate investment management business, with a sharing of fees between them.  Hawkeye/Scout commenced litigation against Panattoni in 2012, claiming that Panattoni owed approximately $75 million for what Hawkeye claimed were investment management fees due based on a venture that Panattoni formed with the California State Teachers Retirement System (CALSTERS).  Panattoni, which develops and manages large-scale industrial real estate projects throughout the world, vigorously defended the action on the ground that the fees generated from the CALSTERS venture were based on a prior relationship and fell outside the scope of the Hawkeye/Scout investment management program.