PHILADELPHIA – The estate for late businessman, philanthropist and newspaper publisher Lewis Katz has had its motion for reconsideration related to direction of escrow payments denied.
On Tuesday, the Philadelphia County Court of Common Pleas denied a motion for reconsideration filed on July 2, in reference to a prior order that directs property sale proceeds into escrow. That order had been filed by the Katz Estate on April 9, but previously denied by the Court on June 5.
The Cherry Hill, N.J.-based Katz Estate had been seeking $16 million to be placed into an escrow account, but claimed it only received $14 million from Philadelphia-based defendants Samuel Rappaport Limited Partnertship, the Estate of Samuel Rappaport and Samuel’s son, estate executor Wil Wes Rappaport.
The defendants claims the funds are being withheld to cover $800,000 in business taxes, attorney’s fees, and the cost of renovations to a separate property at 12th & Sansom Streets in Philadelphia.
A status hearing in this matter has been set for Nov. 9 at Philadelphia City Hall, in Court chambers.
According to court records, Katz and Rappaport formed the Samuel Rappaport Limited Partnership in 1978, with Katz acting as a limited partner and Rappaport as its general partner. After Rappaport’s death in 1994, the Rappaport Estate and Katz equally shared in the Samuel Rappaport Limited Partnership.
Katz died in a plane crash in Bedford, Mass. on May 31, 2014. Unbeknownst to the Katz Estate, Wil Wes Rappaport, the son of Samuel Rappaport and executor of the Rappaport Estate, began trying to sell a pair of properties (one of which was owned by the Samuel Rappaport Limited Partnership and the other by the Katz Estate) – allegedly, with no notice to the Katz Estate.
The first property is located at 219-225 South Broad Street in Philadelphia, known as the “Garage Property” and the second property is adjacent, located at 227-229-231 South Broad Street, and is known as the “Corner Property.”
The Katz Estate alleged Rappaport “created a conflict of interest” between the sellers of both properties by bundling them together for sale for the price of $20 million. Further, the Katz Estate alleged Rappaport unilaterally selected an allocation methodology which would give himself $6 million in proceeds from the sale of those properties that rightfully belong to the Samuel Rappaport Limited Partnership – 50 percent control of which belongs to the Katz Estate.
The Katz Estate claimed Rappaport kept it in the dark about the deal until the eleventh hour, and then refused to allow the Katz Estate to review the terms of the deal.
The Katz Estate also alleged Rappaport hired a lawyer to represent the Samuel Rappaport Limited Partnership and Rappaport Estate in these sale proceedings, while charging all fees to the Samuel Rappaport Limited Partnership.
The plaintiff is represented by David H. Pittinsky of Ballard Spahr, in Philadelphia.
The defendants are represented by Carrie K. Sarhangi in Philadelphia and Louis R. Moffa Jr. in Cherry Hill.
Philadelphia County Court of Common Pleas case 150304018
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at firstname.lastname@example.org