FOLLOW US

In a legal saga fraught with twists and turns, a partner from Jaspan Schlesinger LLP and his former client, embroiled in a $12 million malpractice dispute stemming from advice given in 2015, have narrowly evaded the imminent commencement of a high-stakes jury trial.

Settlement Secured Amidst Trial's Onset

Late Thursday, defendants Stephen P. Epstein and the law firm Jaspan Schlesinger orchestrated a legal maneuver, entering a stipulation of discontinuance without prejudice alongside the plaintiff, Alrose Steinway LLC. This strategic move signified the resolution of a contentious complaint initially lodged against Epstein in 2017. Alrose Steinway had accused him of legal negligence, contending that he had failed to adequately review a critical lease amendment.

Jaspan Schlesinger $12M Malpractice Suit :The Roots of the Legal Clash

The origins of this intricate dispute harken back to 2015 when Epstein provided advisory services to Alrose Steinway concerning a lease held by the company with landlords in Astoria, Queens. The plaintiff's initial complaint asserted that Epstein had negligently characterized a proposed lease amendment as "merely housekeeping." He had reassured Alrose Steinway's principal, Allen Rosenberg, that the document bore no substantive impact on the company's lease rights.

However, Alrose Steinway soon discovered a disturbing reality: the amendment quietly eliminated a "valuable option right" initially embedded in the 2014 lease. This right would have enabled the company to purchase two properties specified in the lease for a mere $11 million in 2023.

Rosenberg, heeding Epstein's counsel, had signed the document without scrutinizing the amendment's content. It wasn't until after the signature that a shocking revelation emerged. The option had been voided, a fact brought to Rosenberg's attention by his broker on the very day of the signing.

In the aftermath, a humbling admission emerged from Epstein himself. During a phone call with Rosenberg, he admitted his error, acknowledging multiple times that he had blundered, as detailed in the complaint.

Jaspan Schlesinger $12M Malpractice Suit : A Costly Turn of Events

By August 2016, Alrose Steinway had entered into an agreement to purchase the same buildings for a staggering $14.5 million. To facilitate the 10% down payment, the company had to part with a 25% interest in the properties, securing additional funds through a two-year mortgage at an interest rate of 10.5%. By this point, the properties had burgeoned in value to an estimated $25 million, significantly diminishing Alrose Steinway's bargaining position.

Settlement Terms Shrouded in Secrecy

The terms of the settlement reached last Thursday remain veiled in secrecy. However, one stipulation of the agreement appears to hint at a financial component: "[U]pon funding of the settlement provided in the settlement agreement, a stipulation of discontinuance with prejudice, currently held by defense counsel in escrow pending funding, will be filed with the court."

As of now, neither party's representatives have responded to requests for comment. Alrose Steinway LLC was represented by Thomas E. Butler and Nicole A. Sullivan of White and Williams LLP, while Stephen P. Epstein and Jaspan Schlesinger LLP were represented by Marian C. Rice and Meredith D. Belkin of L'Abbate Balkan Colavita and Contini LLP.

This settlement marks the conclusion of a legal ordeal that saw fortunes rise and fall, all within the high-stakes arena of litigation.