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Deals & Dealmakers Residential

Sitt runs Heiberger out of TOWN brokerage

By Holly Dutton

Two real estate executives have gone from partners to bitter rivals.

JOE SITT

Days after he was fired as CEO of TOWN Residential, company founder Andrew Heiberger has filed a lawsuit against developer Joe Sitt seeking an injunction to prevent Thor Equities from removing him from the firm’s board of managers.

The suit also requested that his dismissal as CEO of TOWN be declared invalid. The ousted CEO is seeking at least $60 million in damages, according to reports.

Heiberger founded TOWN in 2010 after selling his previous brokerage, Citi Habitats, to Corcoran parent company NRT for reportedly $49.6 million. Heiberger brought in friend and Thor Equities founder Joe Sitt as an equity partner in 2011.

In late January, it was reported that Heiberger had stepped away from his position as CEO of the firm, which he downplayed as the expiration of his three year contract, telling news outlets that he still had a 50 percent stake in the firm.

The shakeup left current president and COO of TOWN Jeff Appel, who joined the firm last September, to step into Heiberger’s shoes as president and CEO of the firm of 600 agents.

News reports later told a different story, that Sitt had fired him, and locked him out of TOWN’s offices.

Sitt claimed Heiberger mismanaged the company and did not follow through on promises about financial returns, while Heiberger claims the returns would be met if Sitt had agreed to an offer to sell the company.

ANDREW HEIBERGER
After being fired, Heiberger obtained a temporary restraining order a week later in court to prevent Sitt from taking control of the TOWN board and buying out Heiberger from the company.

Heiberger has asked that a judge issue an injunction preventing Thor from removing him from the brokerage’s board of managers. He also has requested that his dismissal as Town CEO be declared invalid. In addition, Heiberger is seeking at least $60 million in damages.

According to court documents cited by The Real Deal, Heiberger alleged that he and Sitt discussed selling TOWN for nine figures to an unidentified large international brokerage firm in 2012 and 2013, negotiations that stalled when Sitt would only agree to sell TOWN if “he received substantially more than his fair share of the profits,” according to the documents.

The two are scheduled to atend a hearing in court April 8.

Sitt and Heiberger had previously partnered in business before, when they formed a joint venture in 2005 to buy 88 Greenwich Street, which they converted into a luxury condo building. One of TOWN’s 10 offices is in the building.

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