A New York state decide had some harsh phrases for a Nice Neck actual property scion who claimed he might take cash from his household’s enterprise to dwell as a “king or higher.”
Decide Joel Cohen just lately issued a choice 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 regulation and repeatedly mislead state and federal authorities authorities, in addition to members of the family, each as to his revenue and within the conduct of his enterprise.”
The New York state decide awarded $16.5 million in damages to the household LLCs, wherein Homapour holds a minority stake. Homapour had sought $48 million from Mark, however Cohen stated that quantity contained math errors.
The award shall be diminished by a credit score given to Harounian for working the household enterprise equal to six p.c 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 Nineteen 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 vehicles 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 yr the decide ruled that Homapour didn’t display fraud. An appellate courtroom reinstated the declare, permitting Homapour to deliver the fraud declare to trial. On the trial, Cohen rejected the fraud declare, stating that Homapour didn’t 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 corporations to pay for his life-style, 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 hire rules 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 determination. Cohen stated the scion testified that he believed he might “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, partially, clarify Harounian’s conduct, “they don’t excuse disregarding the governing working agreements.”
“The Court docket’s determination made clear he was no king, his fiduciary duties weren’t a crown, and the household corporations weren’t his kingdom,” stated Terrence and Darren Oved of Oved & Oved, who represented Homapour. “It is a victory not just for our shopper, however for each minority member in a carefully held New York State entity.”
However Harounian’s legal professionals at Pryor Cashman recommended they have been on the profitable 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 determination, which we are going to handle on attraction,” 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 towards him in 2018, alleging his son had confessed to stealing $3 million in household funds.
“I had requested God to present me a very good son, however … I apparently made a mistake after I was asking God,” the patriarch stated by way of a Farsi translator at a 2024 listening to. “As a substitute of giving me a very good son, he gave me this man.”
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