A feud has erupted in a branch of the wealthy Reichmann clan, with a son suing his parents – claiming they cut off his income, leaving him short of money to support his family.
Abraham Reichmann launched the legal fight against his parents, Ada and Ralph Reichmann. Ralph Reichmann is the brother of property developers Paul and Albert, the financiers who created – and lost – Canary Wharf in London and who were once huge property owners in New York City and Toronto.
Ralph, who is now over 80, controls and runs the family tile business, Olympia Tile International Inc., which is still a profitable going concern.
Ralph’s son Abraham has had little to do with the family businesses, although he was involved in a number of failed schemes in the 1990s and early 2000s to build large indoor amusement parks – called Technodomes – in Toronto, Montreal and New York State.
Documents filed in the case, which has been winding its way through Ontario Superior Court for more than a year, give a glimpse into some of the internal conflicts of the famously reclusive family and shed some light on its business ventures.
The dispute began late in 2013 as a fight over Abraham’s family trust agreement. After that disagreement, according to Abraham’s statement of claim, “In a pique, Ralph … cut off all payments to Abraham.”
Abraham claims in court documents that he is no longer receiving any money from his parents despite the fact that they have supported him for years. From 1984 until 2012, he received an average of more than $40,000 a month to support his “lifestyle and religious studies,” court documents show. He is an ordained rabbi and has 10 children, four daughters-in-law and four grandchildren.
His parents, on the other hand, allege Abraham and his wife have more than $7-million in assets, including $3-million in cash and a house worth $2-million. In court documents, they describe him as “a wealthy and unemployed 52-year-old man,” and say he has received his proportionate share of dividends from family companies, including his share of a $2-million payment in 2014. Other payments from his father were gifts, his parents’ statement of defence says.
Abraham is trying to get payments from two different sources.
The first is what he claims is his share of the proceeds from a long-running property dispute in New Jersey. In 2007, he was given the responsibility to manage the litigation for his mother, who had a financial partnership in a New Jersey apartment complex with the family of Zygi Wilf, a New Jersey real-estate developer who is also owner of the Minnesota Vikings football team. The battle over the property has descended into a complex and massive legal dispute that is still ongoing.
Because of his work on the case, Abraham was given the right to half of the proceeds from the litigation, but only when it is complete. While Ada’s company, Jarwick Developments Inc., has already collected money from a settlement and the sale of the apartments, the case is not closed because more appeals have been filed.
Abraham also claims he is owed proceeds from his 7.3-per-cent share in a holding company called Rada Holdings Inc. that partly owns Olympia Tile. Olympia generated retained earnings of $126.7-million in 2014. He alleges in court filings that a reorganization that converted his direct shares in the tile firm to shares in Rada was “oppressive” and essentially handed control to Ralph, who cut off his income.
The monthly payments “not only supported Abraham, but Abraham’s family as well,” his court documents say. “It was Abraham’s reasonable expectation that the monthly payments would continue to support his and his family’s lifestyle as it had for almost 30 years before.” The documents also say that “Ralph draws a salary of $1-million per year from Olympia Tile while he continues to deprive Abraham, a shareholder of Rada, of any benefit.”
Earlier this year Abraham filed a motion in Ontario Superior Court asking for “interim relief” – that he should get some of the money he feels he is owed right away, even though the suit against his parents has not yet gone to trial. He asked for $3-million, plus $42,500 a month.
Justice Frank Newbould ruled on the motion earlier this month. He said Abraham has no claim yet to any money from the Jarwick litigation in New Jersey, because it is not settled and his agreement clearly stipulated he only collects his portion when it is complete. In addition, the judge said, “there is no certainty at all how much money, if any, will ultimately be available from the Jarwick litigation.”
The judge also declined to order the resumption of monthly payments to Abraham from his parents.
However, Judge Newbould said he had some concerns about how money was paid from the family holding company, Rada, to its shareholders. He noted that millions of dollars were advanced by Rada to Ralph, who used them “to provide others in the family with money.” In particular, $30,000 a month has been sent to Abraham’s sister Rochelle in advances on upcoming dividends.
Abraham likely didn’t get similar advances, the judge said, because of the lawsuit with his parents. This was “mean spirited to say the least,” Judge Newbould wrote in his judgment.
Until the dispute between Abraham and his parents is settled, the judge ordered, only actual dividends can be distributed to Rada shareholders, not advances. And in the meantime, he ruled that Rada pay Abraham his share of the advances that have already gone to other family members. That share amounts to $868,000.
In his ruling, the judge describes the fight as an “unfortunate family rift” whose origins are unclear. He also said the case “cries out for settlement” and asked the parties to discuss a mediation process.
The lawyers representing Abraham and Ralph Reichmann declined to comment or could not be reached.
