1 MIAMI-dade TUESDAY, MAY 20, 2014 Official Court Newspaper of South Florida DailyBusinessReview.com vol. 88, no. 237 $2.00 DAILY BUSINESS REVIEW INSIDE law Tondreau mayor to surrender The attorney for North Miami Mayor Lucie Tondreau says his client has been charged with federal mortgage fraud. A2 Nearly $90 million judgment A Brevard County oncologist and the two cancer treatment centers he operated must pay $89.6 million in a whistleblower lawsuit for defrauding Medicare. A3 $1.3 million Peeping Tom verdict A Miami-Dade jury has awarded $1.3 million against G4S, the security firm formerly known as Wackenhut, for hiring a guard who videotaped a teenager through her bedroom window. A2 Emergency suspension requested The Florida Bar is asking the Florida Supreme Court for an emergency suspension against Michael R. Casey, a former Oakland Park attorney facing criminal charges. A3 Tondreau Practice Focus: Premises Liability Negligent security claims have been expanded by plaintiffs lawyers, mostly through a blend of common law duties and duties derived from contracts, according to attorney Justin R. Parafinczuk. A8 Commercial Real Estate Soccer venture to try FEC site Soccer superstar David Beckham s group pushing to build a professional soccer stadium in Miami decided filling in a boat slip and building on top would be doable. A11 Record Lincoln Road purchase A company linked to Joseph Safra, the second-richest man in Brazil, paid $34.5 million for the 6,943-square-foot retail space occupied by an American Apparel store at 720 Lincoln Road in Miami Beach. A9 public notices & the courts Public notices, court information and business leads, including foreclosures, bid notices and court calendars. B1 Public notices from Miami-Dade, Broward and Palm Beach also available at DailyBusinessReview.com/ public_notices.jsp. Public notices published in newspapers statewide available at FloridaPublicNotices.com. Should you have delivery questions, call Postmaster: Send address changes to Daily Business Review, PO Box , Miami, FL Published daily Monday through Friday, except legal holidays, by ALM Properties, LLC., 1 SE 3rd Ave., Suite 900, Miami, FL 33131, (305) ALM, Daily Business Review (USPS ) (ISSN ) Miami Subscription Rates: One year (253) issues - basic (individual and small firms) $429 plus tax; discounted group rates available. Single copies (M-F) - $2. Back issues when available (M-F) - $6. Periodicals postage paid at Miami, FL. Federal Court Fashion Mall owners fight over missing $49 million by Julie Kay The long-awaited face-lift and transformation of the shuttered Fashion Mall in Plantation into a $300 million mixed-use project has hit a major snag. The majority owner of the mall, Tangshan Ganglu Iron & Steel Co. Ltd., has filed suit against the minority owner and manager, Wei Chen, accusing him of misappropriating $49 million. The Tangshan wants a federal judge to appoint a custodian to oversee management of the project and dissolve the company set up to oversee the project, Mapuche LLC. The suit comes just months afsee fashion mall, Page A4 Elections Attorney says he was fired for challenging black judge by John Pacenti Miami personal injury attorney Christian Carrazana said he never thought he d be fired for running against Miami-Dade Circuit Judge Rodney Smith. But Carrazana was fired May 2 by Panter, Panter & Sampedro, a firm he had worked at for 10 years, after he filed papers to run against Smith in August. Carrazana s firing was first reported in the Justice Building Blog, which follows South Florida courthouse gossip and news. Carrazana had no comment on his dismissal, saying instead that his motion in Miami-Dade Circuit Court to modify his child support outlines what happened to him at the law firm when he announced plans to run against Smith. see election, page A4 j. albert diaz Attorney Lida Rodriguez-Taseff, who has filed a suit accusing Fashion Mall s minority owner of misappropriating $49 million, is seeking a custodian for the Plantation mall. Attorney Christian Carrazana said he was fired for running against Miami-Dade Circuit Judge Rodney Smith. Real Estate Midtown acres could go for $200 million by Eleazar David Melendez An undeveloped 17.8 acres in Miami s Midtown commercial district is on the market and drawing a level of interest that could see the property trade for close to $200 million, brokers involved in the marketing told the Daily Business Review. The brokers are hoping to sell the six lots left over from the previous development cycle to a single buyer or syndicate, perhaps someone who will pay a premium for the chance to create a signature large-footprint project. Four lots are north of Northeast 29th Street on either side of the Florida East Coast Railway tracks. Two more are south of 36th Street and southwest of the tracks. We re seeing folks want a big size for development, said Robert Given, a see midtown, page A10
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Offer expires June 30, 2014 and applies to new business checking accounts only. 1. Minimum $5,000 required to open the account. Opening deposit must be new funds. Maintain a minimum average daily balance of $5,000 during the first 90 days of account opening to receive bonus. $150 credit will be applied to your checking account no later than 30 days after meeting the qualification. The value of the promotional bonus will be reported to the IRS on Form 1099-INT. This offer cannot be combined with any other promotion. Limit one account bonus per tax ID number. 2. Schedule and meet with an FCB Treasury Services or Merchant Services Representative within 90 days of account opening to qualify for additional $75 bonus. $75 credit will be applied to your account no later than 90 days from scheduled appointment date. Qualification for $150 bonus must be met first to receive this additional bonus. 3. Apply for a FCB Visa Credit Card within 90 days of account opening to qualify for an additional $75 bonus. $75 credit will be applied to your account no later than 30 days after the initial 90 days of account opening. Qualification for $150 bonus must be met first to receive this additional bonus. BauerFinancial is a registered trademark From the Courts North Miami mayor expected to surrender on fraud charges by John Pacenti North Miami Mayor Lucie Tondreau is expected to surrender today to face federal mortgage fraud charges, her attorney said. Miami attorney Ben Kuehne said Tondreau was out of town Monday and he was arranging her surrender. The U.S. attorney s office in Miami said in a Tondreau Peeping Tom employee costs security company $1.3 million by John Pacenti statement that Tondreau and three others have been charged with six counts of wire fraud. The indictment charged Karl Oreste, president of KMC Mortgage Corp. in North Miami, and Tondreau recruited straw buyers through a radio program they hosted. O. Josiah Odunna, a disbarred Lauderhill attorney, and Kelly Augustin of North Miami also were charged. Odunna owned a title company allegedly used in the scam, and Augustin helped recruit straw buyers, prosecutors said. The indictment alleges the four obtained 20 fraudulent mortgages resulting in $8 million in losses for the lenders. Tondreau was elected in June as the city s first Haitian-American female mayor. A Miami-Dade jury has awarded $1.3 million to a woman who was secretly videotaped by a Peeping Tom security guard in her Old Cutler Bay neighborhood. The lawsuit was against G4S Secure Solutions USA, formerly Wackenhut, which hired Eric Michael Owens in That was 4½ years after he was convicted of prowling in San Diego, plaintiffs attorneys said at trial. Owens secretly videotaped a 17-yearold girl living with her parents. She discovered she was being videotaped 2:45 a.m. in August Owens was charged with criminal voyeurism after his iphone was discovered by police with three video images of the plaintiff in her bedroom. He pleaded guilty to a misdemeanor and received probation. The plaintiff, identified in court papers only as J.G., was represented by attorney Jeffrey Sloman, a partner at the Ferraro Law Firm in Miami. He claimed in the trial before Circuit Judge Jose Rodriguez that the victim suffered posttraumatic stress from the intrusion into her privacy. The 10-day trial also focused on whether Wackenhut willfully ignored She was being investigated separately by state prosecutors about bulk online absentee ballots requests filed from a web address traced to her. Tondreau also is involved in a highprofile fight over control of the Museum of Contemporary Art. MoCA filed a breach-of-contract lawsuit against the city, claiming Tondreau made false statements that the city and its citizens own the art collection. MoCA maintains the city has interfered with its merger talks with the Bass Museum of Art in Miami Beach. Alan J. Kluger, a partner at Kluger, Kaplan, Silverman, Katzen & Levine in Miami, represents the museum. He said MoCA is fed up with a lack of financial and logistical support from North Miami City Hall. Other Miami area suburban mayors have faced federal charges of late. Former Sweetwater Mayor Manuel Maroño was sentenced in January to 40 months in prison for illegally splitting $60,000 in a sham federal grant with a lobbyist. Then-Miami Lakes Mayor Michael Pizzi was charged in August with taking $6,750 in bribes to back grant applications for economic development designed to line his pocket, prosecutors say. He is fighting the charges. John Pacenti can be reached at (305) j. albert diaz Attorney Jeffrey Sloman represented a woman who was secretly videotaped in her bedroom at age 17. Owens criminal history. The jury found Thursday that Wackenhut was negligent in hiring and retaining Owens and awarded $1.33 million in compensatory damages. The jury decided punitive damages were not warranted. This has been a long road, and we are thrilled that the jury held G4S accountable, Sloman said. G4S maintained the woman was partially at fault for failing to close her bedroom blind, which faced a canal and mangroves. G4S attorney Jeffrey T. Foreman of Kenny Nachwalter in Miami did not return a call for comment by deadline. John Pacenti can be reached at (305) CORRECTION In an article published May 19 on Miami Worldcenter litigation, the first name and law firm were inadvertently omitted for attorney Jared Lopez, a partner at Black, Srebnick, Kornspan & Stumpf in Miami DailyBusinessReview-BizSwitch-NA-FINAL.indd 1 5/15/14 12:28 PM
3 DAILY BUSINESS REVIEW TUESDAY, MAY 20, 2014 dailybusinessreview.com A3 Medicare fraudster ordered to pay $89.6 million by Julie Kay A Brevard County oncologist and the two cancer treatment centers he operated have been ordered to pay the U.S. government $89.6 million in a whistleblower lawsuit for defrauding Medicare. The whistleblower, Joseph McBride, a former employee of Dr. Wasfi Makar of Titusville and American Cancer Treatment Centers, was represented by Barbara Perez, a partner at Aronovitz Law in Miami. The firm specializes in representing whistleblowers. The qui tam complaint filed in federal court in the Middle District of Florida alleged Makar and ACTC billed Medicare for imaging tests that were never performed FLORIDA LAW REVIEW Barbara Perez s client is a whistleblower who was a former employee of Dr. Wasfi Makar and American Cancer Treatment Centers. or performed improperly. The false claims were submitted from 2009 to 2012, and the lawsuit was filed in U.S. District Judge James D. Whittemore in Tampa entered the judgment May 14 in the case brought under the federal False Claims Act. As a health care professional, Mr. McBride understood the inner workings of his employer, including the equipment and procedures, Perez said. He knew that patients were not receiving the care they needed and followed his conscience to bring this fraudulent activity to light. American Cancer Treatment Centers is no longer in business and Makar s corporation has filed for bankruptcy protection, making the judgment likely uncollectable, said his attorney, Chad Alvaro of Mateer & Harbert in Orlando. Alvaro entered the case for the damages portion of the case after the default judgment was entered. He maintains the judge erred in refusing to set aside a default, which was entered because the physician thought his bankruptcy filing would stay all other legal proceedings against him. We don t think the ruling is supported by the evidence, and we think the court erred in not setting aside the default so the case could be tried on its merits, he said. He said he was unsure if Makar would appeal. Julie Kay can be reached at (305) Is skull found in 1973 from killing suspect s wife? Felix Vail, held on a murder charge in Louisiana, is the last person known to be with Sharon Hensley. The Associated Press Authorities may test DNA from a skull found in a Florida orange grove four decades ago to see if it may be that of a woman missing since The last person known to be with Sharon Hensley was Felix Vail, who s being held on a murder charge in Lake Charles, La. Brian Hensley told The Clarion- Ledger of Jackson, Miss., that the jaw and cheekbones of a forensic reconstruction of the skull are very like his sister s. He contacted the Burleigh County Sheriff s Department sheriff s deputies in Bismark, N.D. Deputies called the FBI Wednesday about testing the DNA from the skull in Florida against DNA the Hensley family has given. The family s DNA has been checked against other remains they thought might be those of Sharon Hensley, without a match. Vail s letters give different accounts of Hensley s departure, the newspaper said. In a March 20, 1973, letter to his mother, Vail wrote that he had recently sent Hensley and a man off to the ocean and each other with my good wishes and blessings. He didn t give the man s name. A year later, Vail wrote Hensley s mother that he had last seen Hensley in Key West, as she left to travel the world with an Australian couple named John and Venessa. In 1975, Vail told his mother that Hensley had left with Frank and Sally. Vail recently wrote to private investigator Gina Frenzel that he is being railroaded by slanderous lies from hearsay witnesses coached by people who want their 15 minutes of fame, the newspaper reported. In letters to and conversations with Frenzel, Vail talked of traveling with Hensley and surviving off live food that included oranges from groves, grapes from vineyards and apples from orchards. The skull in Florida was found Sept. 23, 1975, in an orange grove near a cemetery in Thonotosassa, not far from Tampa. A pathologist determined the skull was a white woman between the ages of 17 and 25. Hensley was 24. Woman reunited with daughter after nearly 5 years The Associated Press A Central Florida woman was joyously reunited with her daughter after nearly five years after authorities tracked the girl down in Mexico. The Volusia County Sheriff s Office said Jodie Borchert of Deltona was reunited with her 12-year-old daughter Saturday in Miami, where the girl was transported after being found in the mountainous region of Hidalgo, Mexico, about two hours outside Mexico City. The child s father, Aaron Cox, fled with the girl in August 2009, police said. Cox, 55, was arrested and charged with interference with child custody. He is being held in Miami, awaiting extradition Aaron Cox fled to Mexico with his daughter in August Cox and the 12-year-old girl were living in Hidalgo under assumed names. to Volusia County. It s not known whether he has obtained an attorney. It is such a huge relief to bring this case to a successful conclusion, said Brandon Haught, a spokesman for the Volusia County Sheriff s Office. Reports are the girl is extremely happy to be reunited with her family. Authorities have pursued the case since the girl s disappearance, but said no viable leads had emerged until Monday, when a tip was received at the National Center For Missing and Exploited Children. Over the following five days, the Volusia County Sheriff s Office worked with U.S. Marshals, the State Attorney s Office and the Florida/ Caribbean Regional Fugitive Task Force. Cox was arrested without incident, authorities said. The man and his daughter had been living in Mexico under assumed names. The Daytona Beach News- Journal reported Cox could face additional charges and an investigation is still ongoing. Bar seeks emergency suspension for lawyer on lam The Florida Bar is asking the Florida Supreme Court for an emergency suspension against Michael R. Casey, a former long-time Oakland Park attorney who is on the lam after he was charged with mail and wire fraud. The bar s petition filed Monday notes Casey, 67, was charged with in September 2012 in an alleged $19 million fraudulent investment scheme. A bench warrant was issued for Casey s arrest in April after he failed Casey law briefs to appear for a court hearing. An FBI wanted poster states he is considered armed and dangerous. A lawyer for 36 years, Casey was a partner at Berger Singerman and Adorno & Yoss and of counsel at Greenberg Traurig. He is a former chairman of a Broward County Bar Association finance committee. His trial had been set for Monday before U.S. District Judge Joan Lenard in Miami. (Julie Kay)
4 A4 dailybusinessreview.com TUESDAY, MAY 20, 2014 DAILY BUSINESS REVIEW FROM PAGE A1 Fashion Mall: Suit halts redevelopment project ter construction began on the redevelopment project, which is to feature a branded hotel, conference center, condominium tower and office space. The goal was to start leasing space in the seven-story building by the first quarter of The lawsuit filed May 7 was assigned to U.S. District Judge James Cohn in Fort Lauderdale. Attorney Lida Rodriguez- Taseff of Duane Morris in Miami, who represents the Chinese owner, will argue Thursday for a custodian. The mall project has been thwarted and stymied by the actions of defendant Chen, Mapuche s manager, who has defrauded Mapuche, abandoned his managerial duties and has sought to serve and benefit only himself, the complaint alleged. Rodriguez-Taseff said Chen is represented by Pamela Anselmo of Becker & Poliakoff. Anselmo did not return calls or s for comment by deadline. Tangshan has an 80 percent interest in the company, according to the complaint. Chen misappropriated $48.65 million of $50 million lent to Mapuche from March to September 2012 for the redevelopment project, and Tangshan is the guarantor, the suit states. Chen fraudulently used one of his The shuttered Fashion Mall in Plantation has been tabbed for redevelopment in a $300 million mixed-use project. companies, WCH Hospitality LLC, to purchase the last parcel needed to assemble the project, where a Sheraton Hotel is located, the suit alleges. Another allegation is that Chen fraudulently took credit for $1.3 million of the $1.8 million deposit Tangshan paid on the parcel. The closing is set for June 2. Additionally, Tangshan claims Chen has allowed the properties to deteriorate and cited $50,000 worth in penalties on city code citations. Slow Redevelopment Chen has damaged the reputation of Mapuche and has caused a loss of confidence in Mapuche s ability to complete the mall project, the complaint states. Chen has either not maintained adequate books and records for Mapuche or is in the process of disappearing or destroying the existing books and records such that it will be impossible to trace the inflow and outflow of monies to the company. No police report has been filed, Rodriguez-Taseff said. The mall once anchored by Lord & Taylor and Macy s opened in The Macy s remained open until 2006 when Hurricane Wilma caused significant damage. The mall officially closed the following year. In 2007, Mapuche and its holding company, US Capital Holdings Group, announced plans to redevelop the mall. The plan calls for most of the mall to be demolished, and stores to be added facing University Drive. However, the recession, multiple foreclosures and other legal problems stalled the project. Construction crews finally began work in January on a $10 million plan to upgrade an office tower on the site into Class A space. Limited construction work is continuing, said Rodriguez-Taseff. However, the project cannot be completed unless the Chinese owner produces more cash. The only way this project succeeds as planned is if we take it over and put the needed cash into it for the benefit of the community, she said. Julie Kay can be reached at (305) FROM PAGE A1 Election: Candidacy against firm s interest, motion says The pleading said managing partner Brett Panter told him he would not be forced to resign, but he could not expect the firm s support for his candidacy. Panter then did a 180-degree turn and informed the father that the firm will consider whether it will continue to employ the father, the motion states. Carrazana was told he was fired because his decision to run against Smith was against the firm s interest, the motion stated. Support pledged Panter said his firm gave Smith its support last fall during a networking dinner where the judge was the guest of honor. In an obtained by the Daily Business Review to referral network member from Panter, he talked about how Smith gave an update on the new law banning texting while driving. Judge Smith is up for election now so please support him, he is truly a kind and compassionate judge, and we should keep him on the bench, Panter wrote. As always our sphere of influence continues to grow. We have be honored with numerous judges attending our dinners. The pleading goes on to say the firm s managing partners, Brett Panter and David Sampedro, summoned Carrazana to an impromptu meeting April 29. They told the attorney to either withdraw from the race or file for an open seat, according to the motion. In a lengthy footnote, Carrazana said the managing partners told him the firm had received a phone call from an angry former judge asking why their guy is running against Judge Smith. Both Mr. Sampedro and Mr. Panter stated that the perception within the legal community is that the father is running against Judge Smith solely because Judge Smith is African-American, the footnote stated. And that an African-American judge is perceived as being weak in popularity among the Cuban- Latino community in Miami- Dade County. Carrazana, a Cuban- American personal injury protection attorney, was given 24 hours to give the managing partners his decision. Sampedro also told Carrazana that the Cuban American Bar Association wants a diverse bench with different ethnicities regardless of who is better qualified, according to the footnote. Ethnic race Robert Levy of Robert M. Levy and Associates with offices in Miami and Tallahassee is the lead consultant on Smith s re-election and has run more a.m. holt Miami-Dade Circuit Judge Rodney Smith was appointed to the circuit bench in July than 100 judicial campaigns. Levy said Carrazana clearly picked the race against Smith for ethnic reasons. Every cycle we think our community and individual lawyers have matured past all that, but apparently not in his case, he said. Grudge races, no matter what the flavor, always lose, Levy added. Your grudge is not the voters grudge, he said. When someone approaches us to do a campaign with a grudge, we tell them they won t and can t win and take a hike. Smith, a former assistant city attorney in Miami Beach, was appointed to the circuit bench by Gov. Rick Scott in July 2012 after serving as a county court judge. Smith described himself as a skinny kid from Liberty City in a Daily Business Review profile of him in October. No one has to run for judge, Levy said. Carrazana is in the unenviable position of looking for work while running for judge Aug. 26. He is still looking to unseat Smith. He told the Daily Business Review upon qualifying: Having spoken with many attorneys who have similarly appeared before Judge Smith at the county and circuit court level, I believe that I am the more qualified candidate. Panter said Carrazana is a very intelligent excellent PIP lawyer, he said. But we discussed this beforehand with him, and we told him our support was already promised, and our word is our bond. John Pacenti can be reached at (305)
5 DAILY BUSINESS REVIEW TUESDAY, MAY 20, 2014 dailybusinessreview.com A5 the firm Dewey clawback suits hit international partners by Julie Triedman Continuing his push to recover money for Dewey & LeBoeuf creditors, the trustee overseeing the liquidation of the failed firm s bankruptcy estate has filed 11 new suits nine of them against former Dewey partners seeking to claw back a total of $22.5 million. With the latest batch of claims, which were filed Tuesday, liquidating trustee Alan Jacobs has now targeted 32 former Dewey partners in hopes of recovering as much as $40 million to pay off the debts racked up by the largest U.S. law firm ever to file for bankruptcy. The nine partners named in this week s suits were all based overseas during their time with Dewey. All nine chose not to join roughly 450 other former firm partners who signed on to an October 2012 settlement that raised $71.5 million for the estate. As a result, Jacobs is now demanding that they like the other former partners he has already sued repay the estate amounts equal to all the compensation they received from Dewey starting in January 2009, the date he claims that the firm actually became insolvent. In the largest single claim filed Tuesday, Jacobs seeks $13.9 million from former Riyadh, Saudi Arabiabased partner Khalid Al-Thebity, who has represented the Saudi government in various matters for nearly two decades. Al-Thebity joined Al-Thebity Dewey predecessor LeBoeuf, Lamb, Greene & MacRae in 1998 and subsequently set up an affiliated firm in Saudi Arabia, where foreign firms can only operate via a licensed Saudi affiliate. He joined Patton Boggs as head of that firm s affiliated Riyadh office in June 2012, roughly a month after Dewey sought Chapter 11 protection. Others named in the claims filed Tuesday include former Dewey project finance partner Scott Brodsky, who opened a Johannesburg office for LeBoeuf Lamb in 2001 and moved to Baker & McKenzie in late May 2012, and Maggie Soladay The liquidating trustee has targeted 32 former Dewey partners in hopes of recovering as much as $40 million from the largest U.S. law firm ever to file for bankruptcy. former Beijing-based energy partner Dirk Walker, who joined King & Wood Mallesons on June 1, Jacobs is seeking $2.11 million from Brodsky and $2.14 million from Walker. The six other former partners sued Tuesday face claims ranging from $147,125 to $1.12 million. Jacobs, who was appointed as liquidating trustee in March 2013, has hired Texas-based Diamond & McCarthy to handle the partner clawback actions. Andrea Kim and Christopher Murray, two firm partners who were involved in the litigation, declined to comment, as did Jacobs. Like the previously filed clawback claims, the latest round says Dewey s problems mounted in 2009, when profits fell far short of expectations and the firm appeased some partners by agreeing to increase their compensation the following year. When the firm s finances continued to deteriorate, keeping those promises created an even greater shortfall. To make matters worse, the complaint states, some of Dewey s top earners asked for and got additional compensation commitments in exchange for staying at the firm in its final few years. According to the Tuesday filings, Al-Thebiti, Brodsky and Walker were among those whose compensation rose from 2010 on. Al-Thebiti, for example, firm briefs received $2.9 million in 2009, $4.4 million in 2010, $6 million in 2011, and $534,018 in 2012, when he left the firm. Walker s income also peaked in 2011, according to the complaint against him. He received $392,714 from the firm in 2009, $599,318 in 2010 and $759,655 in Brodsky s income rose from $515,636 in 2009 to $852,373 in Jacobs began filing suits last November against the former Dewey partners who did not sign the partner compensation plan and had brought 23 such actions prior to this week. According to his most recent status report, which was filed in March, and a review of the bankruptcy court docket, seven of those have settled and two have been stayed. The 16 cases that have not yet settled have been consolidated for the purposes of discovery. The defendants in all but one of those actions have filed answers saying they are not liable for the claims being asserted. (Both of the clawback cases that have been stayed involve former Dewey partners Geoffrey Coll and Gregory Owens, who filed for personal bankruptcy.) Among the largest of the active claims in active litigation is one against John Altorelli, a former Dewey executive committee member who was among the first major lateral hires the firm made after the 2007 merger of LeBoeuf Lamb and Dewey Ballantine. The trustee is demanding that Altorelli who gave a memorable interview to The Am Law Daily amid Dewey s implosion and is now a corporate and finance partner at DLA Piper repay the estate $12.9 million. Altorelli who is being represented in the clawback action by DLA partner Thomas Califano has been identified as a likely prosecution witness in the criminal case brought by Manhattan District Attorney Cyrus Vance Jr. against former Dewey chair Steven Davis, former executive director Stephen DiCarmine, former CFO Joel Sanders and onetime client services manager Zachary Warren, who are accused of carrying out a massive fraud that helped hasten the firm s demise. (All four men have pleaded not guilty to the charges against them; Warren is seeking to have his case separated from the one against Davis, DiCarmine and Sanders, in part because the firm defending him, Zuckerman Spaeder, is representing Altorelli in his role as a potential witness.) The two other claims filed Tuesday on the trustee s behalf target companies that received payments from Dewey in the 90 days prior to the firm s May 2012 bankruptcy filing. One of the suits seeks the repayment of $865,359 that Dewey paid HBR Consulting, a legal consulting firm founded by Brad Hildebrandt and spun off in 2011, for unspecified services. While Jacobs has sued nearly all of the former U.S.-based partners who did not sign on to the $71 million settlement, as many as a dozen of the firm s former foreign-based partners have not been hit with clawback claims to date. Jacobs also has yet to file any so-called unfinished business suits seeking to recover money earned by firms as a result of work brought over by former Dewey partners. In December, the court approved his request to subpoena the dozens of firms that took on former Dewey partners for information that could provide the basis for such suits. Julie Triedman reports for the American Lawyer, an ALM affiliate of the Daily Business Review. Foley & Lardner consolidate California offices Foley & Lardner, which had an office in San Diego s central business district, decided to move up the San Diego Freeway and consolidate its space with an outpost in suburban Del Mar. Richard Kaufman, cochair of Foley s life sciences industry team and managing partner of its San Diego office, confirmed the closure of the firm s central San Diego office in a statement last week. Kaufman Following a careful analysis of the market and the use of our offices in downtown San Diego and Del Mar, we made the decision to consolidate into a single location last December at our current office space at 3579 Valley Centre Drive in Del Mar in early December 2013, said Kaufman, who joined Foley in 2008 from now-defunct Heller Ehrman. The office consolidation has streamlined our local operations and brought even greater value to clients, while allowing our attorneys to collaborate in one space and continue to provide the same exceptional services to clients located in San Diego and across the globe. Foley follows the lead of other Am Law 100 firms like Baker & McKenzie and Goodwin Procter, which have also closed their offices in San Diego in recent years. Following Foley s decision to close its main base in the city in December, several partners have moved on to other firms. (The American Lawyer) Troutman Sanders opens office in Charlotte Troutman Sanders has opened an office in Charlotte with five partners from K&L Gates four in commercial real estate and one in corporate law. Walter Fisher Jr. will be the office s managing partner. The other partners joining Troutman are G. Lee Cory Jr., David Jones, Patrick Ridinger and Paul Steffens, who is the corporate lawyer. Troutman s chairman, Bob Webb, said the firm has wanted to be in Charlotte for many years but was waiting for the right opportunity. These five partners are very highly regarded in Charlotte and North Carolina and they have national practices, he said. The real estate team has been practicing together for almost 20 years. They were members of a Charlotte firm, Kennedy Covington Lobdell & Hickman, which K&L Gates acquired in Fisher co-led the real estate practice for K&L Gates, which is a 2,000-lawyer firm based in Pittsburgh. Troutman intends to make Charlotte a full-service office, Webb said, adding that energy is one of the areas it will be expanding into. We re going to grow this office very quickly, he said. (Daily Report) Steptoe & Johnson must decide on Washington digs Steptoe & Johnson has a decision on its hands. Between now and the end of the year, the law firm will choose whether to move its 300 Washington lawyers to a new office, or stay in the Dupont Circle building it constructed during the early 1980s. So far, the firm s space committee has thought about spots in NoMa, the budding modernist neighborhood north of Massachusetts Avenue and straddling North Capitol Street. They ve looked around CityCenterDC, where Covington & Burling will move this fall. They ve met a few times a month and talked with developers. The opportunities are many because of the changing and shrinking landscape of law firms and a number of new developments aimed at attracting firms, the largest occupier of space outside of this company town s ruling company, the government. (National Law Journal)
6 A6 dailybusinessreview.com TUESDAY, MAY 20, 2014 DAILY BUSINESS REVIEW People 2014 ALM Properties, LLC. All rights reserved. No reproduction of any portion of this issue is allowed without written permission from the publisher. Langley Mendelsohn Marcia H. Langley and Stephen A. Mendelsohn, shareholders in the Boca Raton office of Greenberg Traurig, have been invited to serve on the Ruth and Norman Rales Jewish Family Services Board of Directors for Langley, a real estate attorney, counsels developers, home builders, private investors and owners. Mendelsohn concentrates his practice on all aspects of commercial litigation through trial and appeals. Cristina T. Sanchez joins Carlton Fields Jorden Burt as an associate in Miami. Sanchez practices in the real estate and commercial finance practice group. Sanchez was an associate at Weissman & Dervishi. Sanchez received her law degree from the University of Michigan and received her bachelor degree from Barnard College of Columbia University. Today Economic Forum of Palm Beach County: The Immigration Reform Issue 11:30 a.m. networking, 12 p.m. lunch. The Kravis Center, Cohen Pavilion, 701 Okeechobee Blvd., West Palm Beach. Cost: $45 members and guests, $60 for nonmembers. For more information, call Jon Kline at (561) or May 21 Coral Gables Bar Association: HIPAA Compliance What All Lawyers Need to Know. 11:30 a.m.-1 p.m. Seasons 52, Coral Way 321, Coral Gables. Cost: $35 members, $45 nonmember, $25 students, free for judges. For more information and to register, visit coralgablesbar.org Dade County Defense Bar Association: Everything You Wanted to Know About the Third DCA buffet lunch with Judge Richard J. Suarez. 12 p.m. Hyatt Regency Miami, 400 SE Second Ave., Miami. Cost: $45 members, $50 nonmembers (additional $5 less than 24 hours advance notice); free for active judges with RSVP. Self parking $10, valet $12; use of Metro Mover Hernandez Mei Kim Nutter legal events Knopik Joe Hernandez has been named head of the real estate practice group for Weiss Serota Helfman Pastoriza Cole & Boniske. Hernanez has a law degree from the University of Miami and bachelor degree from the University of Florida. Yueh-Mei Kim Nutter, a partner for Brinkley Morgan, received an Exceptional People Impacting the Community (EPIC) award from the Mental Health Association of Southeast Florida. Nutter practices in civil litigation with a particular focus on all matrimonial and family law cases and probate and trust disputes. Christopher Knopik joins Laser Spine Institute as chief trial counsel. Knopik is experienced in medical negligence litigation, personal injury litigation, products liability litigation and commercial litigation. He founded the Knopik Deskins Law Group. Knopik graduated from the encouraged. RSVP to Joyce Valerio at or (305) May 22 Legal Marketing Association southeast chapter: Annual media panel lunch program with presenters Carolina Bolado of Law 360, Mark Keller of Latin Trade, Eric Kalis of The Real Deal, Richard Westlund of The South Florida Legal Guide, Sara Fiedelholtz of Executive South Florida and Julie Kay of the Daily Business Review. 11:30 a.m.-1:30 p.m. Bilzin Sumberg, 1450 Brickell Ave., Miami. Cost: $30 members, $50 nonmembers. To register, contact Michelle Martinez Reyes at (305) or Federal Bar Association Broward chapter: Monthly luncheon featuring guest speaking U.S. District Judge Donald M. Middlebrooks, 12 p.m., Riverside Hotel, 620 E. Las Olas Blvd., Fort Lauderdale. Cost: $45 members; $50 nonmembers; $30 government attorneys, $20 judiciary and judicial law clerks. RSVP to Brian Lerner at May 28 Dade County Bar Association Appellate Court Committee: Appellate court lunch with Third DCA Judge Ivan Fernandez. 12 p.m. Shook, Hardy & Bacon, 201 S. Biscayne Blvd., 32nd Floor, LEGAL PRACTICES DIRECTORY Dorby Hauser University of Virginia School of Law. Guy A. Rasco of Devine Goodman Rasco Watts- FitzGerald & Wells was appointed chairman of LAWorld. Rasco was elected during the LAWorld annual conference in Hong Kong in April. Todd R. Dobry joins Ward Damon as an associate. Dorby, a former summer associate for Ward Damon, was in-house counsel intern for Tampa Bay Arena. Dobry is a graduate of Stetson University School of Law and Lehigh University. Robert J. Hauser, a shareholder for Beasley Hauser Kramer & Galardi, has been appointed by the Florida Bar to be chair of the Bar s Appellate Practice Certification Committee. The committee sets standards for certifying lawyers as meeting high standards of proficiency in appellate law. Miami. Seating is limited to the first 35 guests. To RSVP, or visit May 29 Holland & Knight: What Employers Need to Know about Labor and Employment Law in 2014 and Beyond. 8:30 a.m.-1 p.m. Holland & Knight, 701 Brickell Ave., Ste 3300, Miami. To register, visit What-Employers-Need-to-Know-about- Labor-and-Employment-Law-in-2014-and- Beyond / May 30 Federal Bar Association Palm Beach County chapter: Lunch with guest speaker U.S. District Judge Donald M. Middlebrooks. 12 p.m. Colony Hotel, 155 Hammond St., Palm Beach. Cost: $35 members, $40 nonmembers and walk-ins, free for judges and staff Lawyers for Children America: Child advocacy CLE training, includes lunch and features a panel of juvenile court judges, including Judge Maria Sampedro-Iglesia, Judge Alan Fine and GM Steve Lieberman. 9 a.m.-5 p.m. Holland & Knight, 701 Brickell Ave., Ste 3300, Miami. Cost: Free for attorneys who accept a pro bono case from LFCA. 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7 FOCUS LATIN AMERICA DAILY BUSINESS REVIEW TUESDAY, MAY 20, 2014 dailybusinessreview.com A7 Fight for Alcatraz of Caribbean in Puerto Rico by Danica Coto The Associated Press The fortress-like facade of the Oso Blanco prison looms over a gritty neighborhood in the Puerto Rican capital, and even larger in the imagination of many on the island. But perhaps for not much longer. The Puerto Rican government, which struggled for decades to gain control of the prison known as the Alcatraz of the Caribbean, wants to demolish most of the cavernous structure and build an office park aimed at attracting hightech businesses. Preservationists and historians say not so fast. The Rio Piedras State Penitentiary is considered a magnificent example of Art Deco architecture. It s also part of history, though it s a dark chapter featuring brutality and mismanagement. This prison has been a very real part of the lives of Puerto Ricans for more than 80 years, said archaeologist and preservationist Aida Belen, who has been a consultant to the government on what to do with Oso Blanco. So many of us have had a brother, a cousin, an uncle, a neighbor, a relative who was in Oso Blanco. We ve all known someone. Gov. Alejandro Garcia Padilla surprised and angered some people by APPRAISALS & AUCTIONS RESOURCE GUIDE BANK SEARCH BUILDING FOR LEASE ricardo arduengo/ap The former Rio Piedras State Penitentiary, popularly known as the Oso Blanco, is the focus of a preservation battle. mentioning during a budget speech last month that demolition had begun. Since then, officials have been besieged with phone calls and a growing social media campaign hoping to stop the wrecking ball and preserve at least part of the prison as a museum, gallery or open-air park. The former Alcatraz Island federal prison in San Francisco Bay itself is a tourist attraction, with daily tours. The fight over Oso Blanco is a familiar one in Puerto Rico, where clashes over new developments have occurred as remnants of colonial Spanish architecture compete for space with gleaming new beach hotels and upscale condos. Unfortunately, many architectural treasures have disappeared, said Pilarin Ferrer, president of Puerto Rico s Association of Landscape Architects. This is why everyone is so worried. Andy Rivera, president of Puerto Rico Historic Buildings Drawings Society, filed a court petition to suspend the demolition until the studies that recommend such an action be made public, but he was denied. A local senator filed a similar measure this week, joining activists who question whether it s really true that the building is unsafe and unstable. Rivera, an architect, said he wants independent experts to evaluate the building and accused the government of letting Oso Blanco deteriorate on purpose. This is the last prime real estate left in San Juan, he said. That s why Oso Blanco is considered a nuisance. Oso Blanco is on the National Register of Historic Places and was named after the cement brand used to build it. Among its claims to fame: a 1974 exhibition fight featuring boxing legend Muhammad Ali, who sparred with an Litigation and Trial Support Financial Services Office Space for Lease and Sale BUILDING FOR LEASE inmate while Puerto Rican actress and singer Iris Chacon served as referee. Ferrer pointed out that a former jail in colonial Old San Juan houses the island s Tourism Company and says Oso Blanco holds great promise. I would hate to see the memory of that structure erased, she said. Architecture reveals who we were, what we did, who lived there. EXPERT WITNESS LOANS LOANS OFFICE SPACE OFFICE/RETAIL SPACE TENANT EVICTIONS
8 A8 dailybusinessreview.com TUESDAY, MAY 20, 2014 DAILY BUSINESS REVIEW practice focus / premises liability Duty out of control in negligent security cases by Justin R. Parafinczuk There was a time when premises liability negligence claims were confined to slip and falls, maintenance failures, and failure to adhere to published safety standards. Recently, it s become commonplace for Parafinczuk plaintiffs to impose a duty on businesses and landowners to provide security. Without a written contract defining what security is in the context of premises liability, one would be hardpressed to find a lawyer who could explain what it means from a legal perspective. Generally, private security companies have written contracts designating the company s duty on the premises. Unfortunately for the security companies, many contracts are broad and not carefully written. This leads to negligent security claims from plaintiffs injured on the premises mostly through a blend of common law duties and duties derived from the original BOARD OF CONTRIBUTORS contract, whether consistent with the intent of the parties or not. Plaintiffs lawyers look to expand the security company s duty to maintain a cause of action. In most negligent security cases with a contract, defendants rely on the Robert-Blier case where the court held that a security contractor cannot be held liable to a victim for failing to do more than it contracted to do. Robert-Blier v. Statewide Enterprises, 890 So. 2d 522, 523 (Fla. 4th DCA 2005). The court, in making a determination whether a security company may be liable, must interpret the duties in the contract and limit the security company s liability to those identifiable duties. The problem with relying on Robert-Blier is that plaintiffs can poke a few holes in the contract and create a genuine issue of material fact regarding the security company s duties under the contract. In order to prevail on a motion for summary judgment, the security company simply has to have an airtight contract delineating their duties, so the plaintiff cannot argue that there is a dispute regarding the duties of the security company. With negligent security claims, a line must be drawn in the sand so that business owners and security companies can properly evaluate their exposure to liability based on where the business is located and the type of business. This uncertainty has created frustration for security companies and businesses alike. How far has the duty to provide security and the duty of present security been extended? On Nov. 28, in a split opinion, the Third District Court of Appeal upheld a $2.39 million verdict against a security company sued for negligence in the 2003 murder of a Miami Lakes woman. Essentially, the claim was that State Security Service Inc. failed to prevent the murder of woman because of a twohour patrol lapse while the killer, a petty criminal, was in the neighborhood riding his Scan to read more Boards of Contributors bike. This is certainly a horrific event, but what could the patrolman have done? Did he have a duty to check the identification of anyone riding a bike in the neighborhood? The jury believed the guard s failure to patrol caused the murder. Judge Leslie Rothenberg viewed the case quite differently and wrote a 36-page dissent. There are two recent cases where individuals were murdered at gas stations in Miami in high crime areas. The plaintiff s theory in both cases was the same: The station owners should have known that proper security measures must be in place because statistics showed that they were in high crime areas, warranting more security. The question is what could the gas station owners have done? An experienced security company would never enter into a contract with the gas station owners because the security company would be first to be sued. Without any private security companies willing to take the risk of securing the gas station, the gas station owners really have no option but to close their businesses, as their liability is too high. Based on the different rulings of the district courts of appeal, it is difficult to evaluate whether a business needs private security, what the duties of private security are, and whether it is even possible to do business in a highcrime area. The law regarding negligent security is very much in flux, and sometimes so fact-specific that there is no appellate court precedent to guide business and land owners. The Florida Supreme Court will ultimately need to provide some uniformity regarding at least three elements of a negligent security claim: duty, breach and causation. Until then, business and land owners should read these cases as cautionary tales. Justin R. Parafinczuk is a partner with Koch Parafinczuk & Wolf in Coral Gables. The firm specializes in complex litigation and focuses on insurance and liability defense.
9 DAILY BUSINESS REVIEW TUESDAY, MAY 20, 2014 dailybusinessreview.com A9 COMMERCIAL REAL ESTATE by SAMANTHA JOSEPH SOUTH FLORIDA TRANSACTIONS Apartments sell for $42,500 gain Address: 432 SE 20th St., Fort Lauderdale Property type: 7,281-squarefoot, 21-unit apartment complex built in 1974 on a 13,551-squarefoot lot Price: $1.04 million, or $86,875 per unit Seller: GRIF-KO Apartments Inc. Buyer: 432 SE 20th St LLC Past sale: $1 million on Oct. 12, 2007 Miami apartments fetch $2.66 million Address: 1136 NW Second Ave., Miami Property type: 75-unit, 31,207-square-foot apartment complex built in 1947 on a 34,438-square-foot lot Price: $2.66 million, $35,467 per unit Seller: Holdings at City III Buyer: DJ Acquisitions 1136 LLC DEAL OF THE DAY Brazilian billionaire invests $34.5 million on Lincoln Road Address: 720 Lincoln Road, Miami Beach Property type: 6,943-square-foot store built in 1936 on a 7,500-square-foot lot Price: $34.5 million, or $4,969 per square foot Seller: Thai Invest Group Inc. Buyer: 718 Lincoln Owner LLC, linked to Brazilian billionaire Joseph Safra s JSRE Acquisitions LLC Oakland Park Burger King flipped for loss Address: 2201 W. Oakland Park Blvd., Oakland Park Property type: 3,681-squarefoot drive-thru restaurant constructed in 1988 on 0.77 of an acre Price: $1.44 million Seller: Kanari Property Management Co. LLC Buyer: BKF LLC Past sale: $1.66 million on June 2, 2005 Hollywood motel picked in $1.8 million trade Address: 340 Desoto St., Hollywood Property type: 17-room motel with 6,379 square feet of living space Price: $1.8 million, or $105,882 per room Seller: USA Express Inc. Buyer: BH-NV Ella LLC Investors snap up Fort Lauderdale office building Address: 3181 Davie Blvd., Fort Lauderdale J. ALBERT DIAZ Property type: 2,280-squarefoot professional services building on a 14,467-square-foot lot Price: $500,000, or $219 per square foot Seller: Gem Equities LLC Buyers: John C. Ball and Carol S. Ball Past sale: $480,000 on Feb. 17, 2010 These reports are based on public records filed with the clerks of courts. Building area is cited in gross square footage, the total area of a property as computed for assessment purposes by the county appraiser. Lincoln Road retail deals set record at $4,969 per square foot by Eleazar David Melendez One of the richest men in Brazil is behind the latest record-setting purchase on Miami Beach s Lincoln Road. A company linked to Joseph Safra, whom Fortune magazine ranks as the second-richest man in Brazil, paid $34.5 million for the 6,943-square-foot retail space occupied by an American Apparel store at 720 Lincoln Road in Miami Beach. That sale matches the record for a Lincoln Road retail space set earlier this month. At $4,969 per square foot, the latest deal exceeds any retail property sale in Miami Beach history. Safra is accustomed to record-breaking purchases. In 2010, he led a partnership that bought 660 Madison Ave. in New York, spotting $285 million for the world-famous home of Barneys New York. In Miami, Safra has quietly scooped up trophy properties since the real estate bubble popped in The same investment vehicle that purchased 720 Lincoln Road also bought 509 Collins Ave. in 2012, paying more than four times the 2004 price for the two-floor retail building in South Beach. In 2013, a Safra company paid $10.5 million for 3801 NE Second Ave. in Miami s Design District, nearly 10 times its 2002 price. Safra also bought a vacant residential parcel in Golden Beach at 521 Ocean Blvd. The scion of a Middle Eastern banking family with business roots dating back to the 19th century, Safra s fortunes are tied to that of his namesake Brazilian bank. Its New York office recently requested federal approval to open a private banking branch in Miami s Brickell financial district. Eleazar David Melendez can be reached at (305) Joseph Safra Subscribe and save as much as 19% off the newsstand price.
10 A10 dailybusinessreview.com TUESDAY, MAY 20, 2014 DAILY BUSINESS REVIEW FROM PAGE A1 Midtown: Brokers highlight demand in area Five of the six lots fall in the Midtown community development district, meaning they are linked to debt-service obligations incurred when creating the original infrastructure. melanie bell CBRE vice chairman Robert Given says the site is likely to go to some deep-pockets, outof-state developer who might not have been active in South Florida before. CBRE vice chairman who is one of the brokers leading marketing. He said the size of the Midtown offering gives you a critical mass that ll allow someone to establish themselves as a big developer. In Given s estimation, that means the site is likely to go to some deep-pockets, out-of-state developer who might not have been active in South Florida s real estate boom. If you re trying to come here from China or Russia or Venezuela or New York, it s difficult to say, I m going to go build 300 units in a half an acre in Edgewater and justify all the infrastructure you re going to need here for that, he said. If you have the opportunity to build 3,200 units over the next 10 years, however, that gives you something to work with. It s very tempting to a developer who wants to become a large developer in the region if they re not already one. Five parcels fall in the special Midtown community development district, which mean they are linked to debt-service obligations incurred when creating the original infrastructure. The sixth site east of the railroad tracks at just over 6 acres is technically outside the district. Marketing materials suggest up to 150 residential units can be built per acre. While zoning varies from lot to lot, the most densely upzoned areas allow buildings up to 24 stories. The brokers highlight the high demand for retail space and apartments in the Midtown Shoppes development that hugs the real estate being offered. According to the CBRE offering memorandum, less than 2 percent of the 645,000 square feet of retail space in the area is vacant, and quoted rates for retail space are at $42 per square foot triple net. Marketing materials suggest apartment units are renting for over $2.80 per square foot monthly on average in the two residential developments that went up since 2007 in the community district. That s a hefty premium on rates for similar waterfront rentals in the nearby Edgewater neighborhood, where tenants pay $1.50 to $2.25 per square foot monthly, the document claims. Both Given and CBRE senior vice president Gerard Yetming said the potential Midtown development would likely be mostly residential with some retail. There s going to be a lot of retail folks that are going to be interested in this, too, Yetming said As for the potential price, Given said the land is fetching offers of $9 million to $12 million per acre, but he suggested his team is holding out for higher offers. Marketing materials list comparable undeveloped sites that have recently sold in excess of $14 million per acre. We ve had interest over the $100 million mark, not quite the $200 million mark, he said, Because you can have an aggregate 18 acres, it s a big number, so you have the added value of having the critical mass that you can build on. Eleazar David Melendez can be reached at (305)
11 COMMERCIAL REAL ESTATE DAILY BUSINESS REVIEW TUESDAY, MAY 20, 2014 dailybusinessreview.com A11 Beckham group turns focus to filling boat slip by Eleazar David Melendez A group pushing to build a professional soccer stadium in downtown Miami decided filling in a boat slip and building on top would be doable. Miami Beckham United, the venture backed by retired superstar David Beckham, will focus its attention on possibly developing that site, which could face potential construction pitfalls as well as voter review. Previously, Beckham United had said its preferred site was a corner of PortMiami, but that plan ran into opposition from port interests. The alternative is known as the Florida East Coast Railway slip, city-owned property next to Biscayne Boulevard just north of the American Airlines Arena. They re both still excellent sites, but at this point we re going to focus on developing the FEC site proposal, said Niesen Kasdin, Miami managing partner of the law firm Akerman, who is an adviser on the project. Since the slip site is much smaller than the proposed port space, a commercial development component floated as part of the project is now dead, according to Kasdin. This is a stadium-only proposal, he said, There s not going to be additional commercial development. Kasdin said the Beckham group would keep its promise of not requesting municipal funds for stadium construction or upkeep. Voter approval would be required for a long-term lease or transfer of the FEC site. A resolution to be presented at Thursday s Miami City Commission meeting would require another referendum if promised improvements granted through the lease don t materialize within four years. Eleazar David Melendez can be reached at (305) Blackstone may be selling Boston buildings for $2.1B by Hui-yong Yu Bloomberg News Blackstone Group LP agreed to sell five office properties in Boston to a venture led by Toronto-based Oxford Properties Group for about $2.1 billion, according to two people with knowledge of the transaction. The buildings total almost 3.3 million square feet and are mostly in downtown Boston, said the people, who asked not to be named because the sale is private. The sale is Blackstone s largest of U.S. office properties since the real estate market crash. Oxford plans to purchase 100 High St. and 125 Summer St., and team with JPMorgan Chase & Co. s asset-management unit to buy three other properties: 60 State St., 225 Franklin St. and One Memorial Drive in nearby Cambridge, the people said. Blackstone also is selling its roughly half-stake in Boston s Rowes Wharf to part-owner Morgan Stanley for Blackstone may be selling its half-stake in Boston s Rowes Wharf to part-owner Morgan Stanley for about $200 million. about $200 million, according to one of the people. Peter Rose, a spokesman for New York-based Blackstone; Claire McIntyre, a spokeswoman for Oxford Properties; and Matt Burkhard, a spokesman for Morgan Stanley, declined to comment. Kristen Chambers, a spokeswoman for JPMorgan, didn t respond to an sent outside regular business hours. The Wall Street Journal reported the transaction Sunday. Blackstone has been selling assets from its 2007 takeover of Equity Office Properties Trust as real estate in prime U.S. coastal markets rebounds. Office prices in central business districts jumped 25 percent in the 12 months through March, for the best performance of any core commercial-property type, according to Moody s Investors Service and Real Capital Analytics Inc. ROWES WHARF Blackstone, the largest private-equity investor in real estate, had held talks with several potential buyers besides Oxford Properties. The sales price of about $2.3 billion for the six Boston assets was in line with its target for total proceeds of about $2.5 billion, which had assumed that 100 percent of Rowes Wharf would be sold. Rowes Wharf, the pink-hued building with an arch overlooking Boston s harbor, includes a hotel as well as office space. Chicago-based Equity Office was the largest U.S. office landlord at the time Blackstone acquired it for $39 billion from billionaire Sam Zell, and the private-equity firm immediately flipped many of the buildings to pay down debt. Oxford Properties is the real estate unit of Ontario Municipal Employees Retirement System, overseeing about $20 billion of assets that it manages for itself and on behalf of partners. It has stakes in about 50 million square feet of office, retail, industrial, apartment and hotel properties, mainly in Canada, the U.K. and U.S. In the U.S., the company is focusing on office and retail investments in New York and Washington, while exploring diversification into other cities including Boston, Los Angeles and San Francisco, according to its website. Senior housing surplus may arrive ahead of expected boom WIKIMEDIA by Brian Louis Bloomberg News Real estate developers are betting big on U.S. housing for the elderly, preparing for a surge in demand as the population of senior citizens almost doubles in the next 35 years. They may be building too fast. A jump in supply is forecast to cut growth in senior-housing net operating income to 1.8 percent in 2015 and 1.4 percent in 2016 from 3.3 percent this year, according to Green Street Advisors Inc. The increase may hurt health-care real estate investment trusts and companies including Brookdale Senior Living Inc., which is buying competitor Emeritus Corp. for about $1.4 billion to become the biggest owner of senior properties, the research firm said. Increased supply is always worrisome in any type of commercial real estate, said Jim Sullivan, a managing director at Newport Beach, Calif.-based Green Street. In senior housing, new construction has ramped up considerably over the last two years. Health-care REITs, which soared to records early last year, have been the worst-performing part of the propertytrust market in the past 12 months. The U.S. had 526,144 senior-housing units in the 31 largest markets in the first quarter, up 1.4 percent from a year earlier, and an additional 16,181 units are under construction, according to the National Investment Center for the Seniors Housing & Care Industry, a trade group based in Annapolis, Md. The Bloomberg health-care REIT index has fallen 18 percent in the past 12 months, compared with a 4.7 percent decline for the broader Bloomberg REIT index. The companies, which were trading at large premiums to their net asset values, have been hurt over concern about a narrowing of the spread between their capital costs and property prices, said Ian Goltra, a money manager at Forward Management LLC in San Francisco. Building and owning housing for the elderly have become more popular as baby boomers age. The population of people 65 and older is projected to surge to 83.7 THE ASSOCIATED PRESS Thanks to the Baby Boomers, the population of people 65 and older is projected to surge to 83.7 million in 2050 from 43.1 million in million in 2050 from 43.1 million in 2012, the U.S. Census Bureau said this month. Baby boomers those born between mid and mid-1964 began turning 65 in 2011, according to the bureau. Housing for the elderly varies greatly. Independent-living communities serve those who need little assistance with daily living, and sometimes include meals and activities, Brookdale s website shows. At assisted-living properties, residents usually receive help with bathing, dressing, transportation and medication management, according to the Assisted Living Federation of America, a senior-housing trade group based in Alexandria, Va. Some properties have a mix of services. One example is the Hallmark, a high-rise on Chicago s lakefront north of downtown that offers independent- and assisted-living options. The property, operated by Brentwood, Tenn.-based Brookdale, has transportation services, meals, a walking path, housekeeping and an exercise room. Among the largest senior-housing companies are Chicago-based Ventas Inc., which owns 713 communities; Toledo, Ohio-based Health Care REIT Inc., with 711 properties; Long Beach, Calif.-based HCP Inc., with 444; and Brookdale, with 555. In February, Brookdale agreed to buy Seattle-based Emeritus. Messages left for Ross Roadman, senior vice president of investor relations at Brookdale, weren t returned. There s been a little bit of an uptick we re mindful of that, said Brookdale chief executive officer T. Andrew Smith when asked about supply at a Barclays Plc conference in March.
12 A12 dailybusinessreview.com TUESDAY, MAY 20, 2014 DAILY BUSINESS REVIEW BANKING / FINANCE Sears battles cash drain by selling off parts by Tara Lachapelle Bloomberg News Sears is running out of ways to address its cash drain. Even before Sears Holdings Corp. said last week it s considering selling Sears Canada, the retailer had already been divesting real estate and pieces of its business such as Lands End to raise the cash it needs to fund operations. That s left Sears, which faces operating losses of more than $1 billion a year for the foreseeable future, with fewer attractive assets left to sell to keep plugging the gap, according to International Strategy & Investment Group LLC. After Sears Canada, you look at what remains and there s not a whole lot before you get to the scrapping and junking, Louis Meyer, a special situations analyst at Oscar Gruss & Son Inc. in New York, said in a phone interview. This is like a long-term liquidation sale, and Sears is trying to spin off or sell anything that has value. Sears may divest its $746 million remaining stake in its Canadian stores, possibly as a sale of the whole unit. Pension funds, retailers or privateequity firms may take a look, said Desjardins Securities Inc. Sears remaining units would include its core store chains Sears and Kmart, a reinsurance unit and an auto-repair business. The more it sells, the less there is to generate cash or Sears CEO Edward Lampert and his hedge fund, which own almost half the shares, have been propping up Sears while looking for a way to make money again. Turnarounds are challenging, but transformations are even harder, Lampert said. borrow against the next time funding needs arise, said David Stowell, a professor of finance at Northwestern University s Kellogg School of Management. Chris Brathwaite, a spokesman for Hoffman Estates, Ill.- based Sears, said in an ed statement that the retailer is embarking on a transformation of its business, from simply being focused on selling products in a traditional store network, to serving our members wherever, whenever, and however they want to shop. As part of this transformation, we ve continued our efforts to simplify and focus our company, while simultaneously creating longterm value for our shareholders. Through these efforts and through other initiatives, we believe we have demonstrated the financial flexibility we have to fund our transformation and to create long-term shareholder value, he said. We have met our maturing obligations, and we believe we ve positioned ourselves to give our transformation time to bear fruit. Sears was at one time the largest U.S. department-store chain, profitable and generating cash. When it split off financial businesses such as Allstate Corp. and Discover credit cards to become purely a retail chain, investors cheered. Now, every analyst who rated the company as of this year says investors should sell, according to data compiled by Bloomberg. Forget price-sales ratios and peer-group comparisons: Any valuation of the shares based on traditional metrics is flawed because what matters now is how much the remaining pieces can fetch, said Matt McGinley, a New York-based analyst at ISI. The stock is being propped up by chairman and chief executive officer Edward Lampert and his hedge fund, which own almost half the shares, he said. Sears Canadian operations, which were spun out in 2012, last year announced plans to cut almost 800 jobs and sell store leases to raise cash as it tried to stop a streak of 20 straight quarters of declining year-overyear revenue. Major landlords, pension funds or private-equity firms may have an interest in Sears Canada, according to Keith Howlett, an analyst at Desjardins in Toronto. The sale also could give Macy s Inc. or Kohl s Corp. an opportunity to expand in the country, he wrote in a May 14 report. On the other hand, Target Corp., which is larger than Macy s and Kohl s, has struggled with its own expansion into Canada. Sure, there will be plenty of lookers, but I don t think they re going to get too many bidders, McGinley of ISI said in a phone interview. Given the issues Target has had, the appetite for a U.S. retailer like Macy s to go into Canada is probably quite limited. My hunch is it s unlikely they get a bid for Sears Canada and probably wind up spinning this out to shareholders. Activist fund accumulates 3.5 percent stake in B/E Aerospace by Beth Jinks and Julie Johnsson Bloomberg News Relational Investors LLC, the activist fund co-founded by Ralph Whitworth and David Batchelder, disclosed a stake of about 3.5 percent in B/E Aerospace Inc. as the maker of aircraft seats conducts a strategic review. The firm started buying the shares in February and began talks with B/E management shortly therafter, according to a person familiar with the matter. San Diego-based Relational, which manages about $6 billion, disclosed the stake last week in a regulatory filing. Relational supports B/E s decision to evaluate options to improve capital allocation and maximize shareholder returns, and is considering whether to seek board seats before the June 4 nominating deadline, said the person, who asked not to be identified because the talks are private. B/E s review, disclosed May 4, surprised some investors because B/E had just said in April that it was working on two acquisitions of its own. In addition to seats, B/E supplies aircraft beverage makers, galley chillers, oxygen and lighting systems and aerospace fasteners. It also has made a foray into the oil and gas There is an 85 percent probability that B/E Aerospace, which makes aircraft seats, will be sold. equipment-distribution business. Greg Powell, a spokesman for B/E, didn t respond to a voice message seeking comment. B/E, based in Wellington, said it hired Citigroup Inc. and Shearman & Sterling LLP to help it explore alternatives, including a sale of the whole company or separation of selected businesses. B/E Aerospace has great core assets and a strong competitive position, Matthew Hepler, managing director of research at Relational, said in an ed statement. We welcome the company s announcement to explore strategic alternatives and will encourage the board to evaluate and pursue opportunities, in a disciplined manner, that will maximize value for all shareholders. Amin Khoury, 75, co-founded the aerospace supplier with his brother Robert in 1987 and is chairman and co-chief executive officer, splitting his executive duties with operations chief Werner Lieberherr since the start of the year. The board has just six members, including the Khoury brothers. The outcome of the review is very much dependent on Mr. Khoury s intentions, Joseph Nadol, a New York-based aerospace analyst with JPMorgan Chase & Co., wrote in a May 13 research report. As recently as two weeks ago, we would have thought those were to continue growing B/E Aerospace in its core aerospace market as well as in oil and gas rental equipment. B/E Aerospace s aviation sales have boomed as planemakers Boeing Co. and Airbus Group NV compiled a record backlog of 10,130 orders, according to data compiled by Bloomberg Industries. First-quarter results were the best ever, Khoury told analysts on a call last month. Relational also holds stakes in energy group Hess Corp., agricultural commodity processor Bunge Ltd., snacks supplier Mondelez International Inc., x-ray maker Hologic Inc. and air- conditioning manufacturer Ingersoll-Rand Plc, according to its most recent holdings disclosures. Third Point LLC, the hedge fund run by Daniel Loeb, exited its B/E holdings in the first quarter, according to a regulatory filing. B/E has invested 6.7 percent of sales in the last decade in innovations ranging from the dimmable lighting for Boeing s sculpted Sky Interiors, to compact lavatories and luxurious first-class seating, Howard Rubel, a New York-based aerospace analyst with Jefferies LLC, said in a May 5 report. The supplier has been rewarded by gaining market share faster than its peers, Rubel said. B/E provides as much as $10 million in products on each new twin-aisle jetliner and as much as $1.5 million per narrow-body delivery, he said. Rubel said there is an 85 percent probability that the entire company will be sold, and a 15 percent chance it would spin out a consumables unit that provides aircraft parts as well as oil and natural gas services. B/E Aerospace has acquired $515 million in energy-related businesses over the past nine months.
13 DAILY BUSINESS REVIEW TUESDAY, MAY 20, 2014 dailybusinessreview.com A13 PEOPLE Traxler Forster Wright Catone Blanch Socorro Peralta Jimenez John Traxler has joined Miller Construction Company as senior preconstruction manager. Traxler is responsible for estimating and preconstruction for diverse projects, while guiding clients through critical cost/benefit decisions. Traxler was a vice president for Balfour Beatty Construction. Traxler earned his bachelor degree from the University of Louisiana at Monroe. The Jo-Ann Forster Group has joined ONE Sotheby s International Realty. The team is led by Jo-Ann Forster, who will serve as senior vice president of the Coral Gables office, and her son, Brian Forster-Shapiro. Katrina Wright joins BankUnited as vice president for community development and outreach. Wright worked for Bank of America in Miami. Wright earned a bachelor degree from Florida A&M University. Tony Catone has been promoted to creative director at Exults Internet Marketing. Catone has a bachelor degree from the University of Florida. Gaston Blanch joins Franklin Street in the insurance services division as a director for the Miami office. Blanch works with real estate owners and commercial businesses designing property and casualty programs. Blanch worked for Willis Group. He has a bachelor degree from the University of Florida. Dize Kandu has joined Worldwide Properties as a Realtor. She will specialize in the sales and marketing of luxury residential condominiums in Miami Beach and Miami. Kandu is a graduate of the University of Miami. Jesus Socorro has joined Morrison, Brown, Argiz & Farra as a principal in the audit department. Socorro will cover the Miami-New York corridor. Socorro received a master of business administration from Northwestern University and a bachelor degree from Florida International University. He also completed graduate business study at the Hong Kong University of Science and Technology, and a management and leadership program at Harvard University. Daniel Peralta has been appointed director of client development for Jacober Creative. Luisa Jimenez joins Jacober Creative as business development associate. Lourdes Oquendo-Oria has founded Oria Mananagement, a commercial and residential property management company in South Florida. Oquendo-Oria has more than 17 years of commercial property management experience in South Florida. She holds a bachelor degree from Florida International University. BUSINESS BRIEFS CAMPBELL SOUP CUTS SALES OUTLOOK, SHARES FALL Shares of Campbell Soup fell Monday after the company reported quarterly sales that fell short of Wall Street expectations and cut its forecast for the year. The company, which also makes Prego sauces and Pepperidge Farm cookies, said net income rose 2 percent for its fiscal third quarter as expenses declined and revenue edged up slightly. But Campbell also said it expects adjusted earnings to be on the low end of its previous projections for its fiscal Campbell s shares dropped almost 7 percent Monday. U.S. soup sales gains were comparable to the 14 percent rise in last year s quarter, but President and CEO Denise Morrison said in a statement that the company was disappointed the performance wasn t stronger. Morrison said that Campbell Soup had more frequent soup promotions during the quarter, but that it didn t see the boost in soup sales that it was expecting. She did, however, note that Swanson broth sales remained strong as consumers responded to its marketing efforts and continue to cook more with broth. Sales for the baking and snacking division which includes Pepperidge Farm dipped 1 percent. The U.S. beverages unit reported a 4 percent drop in sales, partly because of lower sales of V8 V-Fusion and V8 Splash. (The Associated Press) BURGER KING SCRAPPING HAVE IT YOUR WAY SLOGAN Burger King is scrapping its 40-year-old Have It Your Way slogan in favor of the more personal Be Your Way. The chain says the new tag line will roll out across its marketing in the U.S., including in a TV ad that will begin airing Monday night. The line made its first appearance in an online video last month. Burger King says in a statement that the new motto is intended to remind people that they can and should live how they want anytime. It s OK to not be perfect.... Self expression is most important,and it s our differences that make us individuals instead of robots. It may seem odd for a fast-food company to champion individuality, but Burger King isn t the only one trying to project a hip, non-corporate attitude to gain favor with customers. Since 2012, for instance, Taco Bell has been touting its Live Mas slogan, which means live more in Spanish. Fernando Machado, Burger King s senior vice president of global brand management, noted in an interview that Have It Your Way focuses on only the purchase the ability to customize a burger. By contrast, he said Be Your Way is about making a connection with a person s greater lifestyle. We want to evolve from just being the functional side of things to having a much stronger emotional appeal, said Machado, who joined the company in March. (The Associated Press) LL BEAN S CHIEF EXECUTIVE TO STEP DOWN IN 2016 The first nonfamily member to lead L.L. Bean is planning to step down in 2016 after more than a decade as CEO, saying the Maine-based retailer is positioned for future growth. Chris McCormick, president and CEO, told employees in a memo that he s giving early notice so there can be a smooth transition. During his tenure, McCormick helped to transform the 102-year-old outdoors retailer from a catalog company into a multi-channel retailer that does most of its business online. He s also sped up the opening of retail stores, with 19 stores now in operation and plans to open three more this year. The privately held firm is coming off its fourth year of consecutive growth. In this time together, we weathered the dramatic business impacts following the tragic events associated with 9/11. We also managed our way through, and even prospered (though with some sacrifices) during the deepest recession in more than half a century, he wrote. The company has grown, is financially strong and debt free. (The Associated Press) BUSINESS EVENTS May 20 Commercial and Industrial Association of South Florida: 8th Annual Office Market Report. 11:30 a.m.-1:30 p.m. Southeast Financial Center, 200 South Biscayne Blvd., 24th Floor, Miami. Cost: $40 CIASF members, $55 nonmembers; $70 RSVPs after May 15 and walk-ins. To RSVP, Financial Planning Association of Greater Fort Lauderdale: Chapter meeting and continuing education program on the topic The Importance of Diversification and Continued Exposure to Fixed Income During a Time of Market Volatility and Interest Rate Uncertainty with guest speaker Daniel Dean of Semper Capital Management/ CAVU Securities LLC. 11:30 a.m. networking, 12:00 lunch and continuing education program. Weston Hotel, 400 Corporate Drive, Fort Lauderdale. Cost: $55 members, $65 nonmembers and guests. Contact Linda Wolonick at (954) , or Greater Miami Chamber of Commerce: Health Care Heroes Awards. 11:30 a.m. registration,12 p.m. lunch and program. Jungle Island, 1111 Parrot Jungle Trail, Treetop Ballroom, Miami. Cost: $80 per person, $800 per table of 10. Information and registration available online at www. MiamiChamber.com May 21 CREW-Fort Lauderdale/Palm Beach: Quarterly breakfast. 8-9 a.m. Empire Office, 2 Oakwood Blvd., Ste 140, Hollywood. Cost: Free for members and nonmembers. To register, Ashley Mierzwiak at CREW-Miami: Top New Trends for Miami s Hospitality Market, featuring a discussion on hotel product types, unique hotel services and amenity offerings that make Miami a top-ranked hotel market nationally and globally. 11:30 a.m. registration/networking; 12-1:30 p.m. lunch program. Four Seasons Brickell, 1435 Brickell Ave., Miami. Cost: $45 members, $55 nonmembers, $65 walk-ins. RSVP by May 19 at or by calling (305) May 22 Greater Miami Chamber of Commerce: Bagels with the Boss. 8 a.m. registration and breakfast, 8:30-10 a.m. program. Greater Miami Chamber of Commerce, 1601 Biscayne Blvd., Miami. Cost: Free. Information and registration available online at Broward County Chamber of Commerce: Broward County Expo. 5-9 p.m. JM Lexus, 5350 W. Sample Road, Margate. Cost: $10 in advance, $15 at the door. For more information, contact Marty Kugelman at (954) , ext. 503, or May 23 LeTip East Broward: Business professionals networking breakfast. 7 a.m. Sheraton Fort Lauderdale Airport, 1825 Griffin Rd., Dania. For more information, call (954) Chamber South: Military appreciation general member breakfast with speaker Brig. Gen. Sean P. Mulholland, commander of U.S. Special Operations at Command South. 7:15 a.m.-9 a.m. Miami Dadeland Marriott, 9090 South Dadeland Blvd., Miami. Cost: $25 for members, $35 for nonmembers with RSVP; additional $10 at the door. To RSVP or for more information, call (305) or May Minority Chamber of Commerce: 2014 Global Minority Women s Summit, a two-day event that reflects how women are changing the global marketplace and public service around the world. DoubleTree Miami Airport, 711 NW 72nd Ave., Miami. For more information or to register, visit May 29 Greater Miami Chamber of Commerce Health Care Committee: Panel discussion on reducing health care costs and improving employee health by using the population health management concept with a keynote presentation by Karen Van Caulil, CEO of Florida Health Care Coalition, titled The Population Health Management Toolkit: What Employees have Learned. 8 a.m. registration and breakfast, 8:30-11 a.m. program. Greater Miami Chamber of Commerce, 1601 Biscayne Blvd., Miami. Cost: $35 members, $45 nonmembers, $50 onsite. Information and registration available online at com May 30 LeTip East Broward: Business professionals networking breakfast. 7 a.m. Sheraton Fort Lauderdale Airport, 1825 Griffin Rd., Dania. For more information, call (954) June 3 CREW Fort Lauderdale/Palm Beach: Lunch program on the topic Multi-Family What is the current forecast and how will new projects change the downtown experience in Ft. Lauderdale and Boca Raton? 11:30 a.m. Fort Lauderdale Marriott North, 6650 North Andrews Ave, Fort Lauderdale. Cost: $40 members, $55 nonmembers. RSVP at org/2014/multi-family-current-forecast-willnew-projects-change-downtown-experience-ftlauderdale-boca-raton.html. Contact: Mary Beth Reed at (954) or org. Sept. 30-Oct. 3 Commercial Real Estate Women: 2014 CREW national convention and marketplace, Loews Miami Beach. Submit information about upcoming events to
14 A14 dailybusinessreview.com TUESDAY, MAY 20, 2014 DAILY BUSINESS REVIEW
15 A15 dailybusinessreview.com TUESDAY, MAY 20, 2014 OFFICE HOURS Monday Friday, 8:30 am 5 pm TEL: (855) (855-8LAWJOB) PUBLISHES DAILY: Monday Friday COPYRIGHTS All property rights and copyright interest in advertisement, materials and proofs produced are retained by the publisher. Advertisers may not reproduce, copy or republish advertisements, materials, or proofs, nor permit such without prior written permission of the publisher. DEADLINES Deadline for placing or correcting an ad is 2:00 pm each day for the next day s paper except for ads with photos, logos or special typesetting. The deadline for ads with special handling is 2:00 pm, two days prior to publication. Deadline for cancelling an ad is 11:00 am each day for the next day s paper. COPY CONDITIONS/POLICY The Daily Business Review reserves the right to reject any copy and/or advertisement. While every effort is made to ensure ads run correctly, typographical errors may occur. Please check your ad the first day it appears to verify for accuracy. In the event of an error, compensation for correction will be given in the form of credit toward future advertising. Liability for errors shall not exceed the cost of the space occupied by the error. Employment Attorneys Employment Attorneys Employment Paralegal/Legal Assistants Employment Paralegal/Legal Assistants Employment Paralegal/Legal Assistants Employment Paralegal/Legal Assistants EMPLOYMENT OPPORTUNITY For information on placing an ad in our section, please call: or 855-8LAWJOB, ext 4 CORPORATE SECRETARY The Miami offi ce of Holland & Knight is seeking corporate secretary. Professional, highly skilled secretary with at least 3+ years of exp. working as a corporate legal secretary. Ideal candidates will have extensive experience managing busy calendar, meetings and typing of correspondence. This position also requires you to keep track of all expenses and time entry. Candidates must be able to work in a fast paced legal environment with the ability to multi-task and effi ciently prioritize daily assignments. In addition, must have computer profi ciency with Microsoft Offi ce applications. Salary commensurate with exp. Interested candidates should LEGAL SECRETARY/PARALEGAL Coral Gables Small Med Mal/PI firm is looking for a highly capable litigation secretary/paralegal. Bilingual (Spanish) preferred. Salary commensurate with exp. resume to: Advertising that works! Call in Dade, or 855-8LAWJOB, ext POSITIONS WANTED / FREELANCE TO PLACE YOUR AD IN THE POSITION WANTED OR FREELANCE SECTION Please contact DANNY WILLIAMS at (855-8LAWJOB) or via at ATTENTION SOLO PRACTITIONERS! DOCUMENT DRAFTING QUICK TURN-AROUND, PROFESSIONALLY DONE. BY THE HOUR, BY THE DAY. Over 30 years law firm experience. Located in Broward County. Call Andrea at or References.
16 ON APPEAL by NOREEN MARCUS For full appellate case opinions, please visit dailybusinessreview.com. A16 dailybusinessreview.com TUESDAY, MAY 20, 2014 It s lose-lose for Florida justices in defining sex Like Bill Clinton circa Monica Lewinsky, the justices of the Florida Supreme Court are being asked to define sexual intercourse. They re in a similar lose-lose position. Impeachment followed the president s assertion, I did not have sexual relations with that woman, the one who was hoarding a stained blue dress. Somehow he kept his job and his wife. If the justices rule that the term sexual intercourse in Florida s HIV disclosure law covers same-sex behavior, they ll invite outcries from the left. Liberals would deride them for the politically incorrect idea it s OK to punish HIV sufferers who belong to the gay community. If they say the term refers only to male-female relations, conservatives will nail them for reverse discrimination. The high court s dilemma arises from a case in which the Third District Court of Appeal decided that Gary Debaun can be prosecuted for a third-degree felony. He is charged with persuading another man to have sex with him by sharing a false lab report showing he was HIV negative. The disclosure law, Florida Statutes Section (2), punishes HIV carriers who don t reveal their status to their bed partners. The issue is a tough one for gays who support legal rulings that extend equal status to same-sex conduct. Yet they oppose HIV disclosure laws, arguing they stigmatize people infected with the virus. Norm Kent, a Fort Lauderdale gay rights lawyer and publisher, has called Florida s law draconian. Judge Linda Ann Wells wrote that targeting only straight sex makes no sense. PRECEDENTIAL RULING The text doesn t define sexual intercourse. On Oct. 30, the Third District defined it broadly. Because the law aims generally at preventing sexually transmitted diseases however they are caused, targeting only straight sex makes no sense, Judge Linda Ann Wells wrote for the panel majority. Such a result would be absurd. The Second District Court of Appeal came to the opposite conclusion in A woman identified only as L.A.P. pleaded guilty to violating the HIV disclosure law but reserved the right to appeal. Looking to the incest statute, which says sexual intercourse is the penetration of the female sex organ by the male sex organ, the court ruled the HIV disclosure law didn t apply to L.A.P. s activities. [W]e are compelled to reverse her conviction, Judge Anthony Black wrote. The Key West trial judge who dismissed the charges against Debaun relied on L.A.P., Wells noted. Her opinion reversing the lower court also certifies conflict with the Second District. Both the Miami-Dade public defender and the Florida attorney general urged the high court to accept jurisdiction. On April 3, their request was granted. CHANGING TIMES In the unlikely event the justices decide to delve deeply into the HIV disclosure law, they ll have lots of relevant sources to tap. Thirty-four U.S. states and territories have criminal statutes based on exposure to HIV, most dating from the 1990s. There have been prosecutions in at least 39 states, under HIV-specific laws or general criminal laws such as reckless endangerment. The laws are criticized as obsolete, having been adopted before antiretroviral treatment turned HIV into what the Center for HIV Law & Policy calls a chronic, manageable illness. The stigma was richer than it is today it was considered a death sentence, Beirne Roose-Snyder, managing attorney for the New York-based center, told a gathering in Wilton Manors. There s just this assumption that no one would ever knowingly have sex with J. ALBERT DIAZ someone who s HIV positive, she said in a South Florida Gay News report of the meeting. Cue a political sea change. The REPEAL (for Repeal Existing Policies that Encourage or Allow Legal) HIV Discrimination Act now before Congress has the backing of the ACLU and the U.S. Conference of Mayors, among others. The White House supports the HIV decriminalization policy of the Centers for Disease Control and Prevention. The REPEAL Act has even won that rarest of all things in Congress, bipartisan backing. Sponsors are Reps. Barbara Lee, D-Calif., and Ileana Ros-Lehtinen, R-Fla., who claims 41 co-sponsors in an impassioned statement on YouTube. The act would encourage states to bring their HIV criminal laws into compliance with the current scientific understanding of how the virus is prevented and treated. These laws create a climate of fear and distress, stigmatizing those with HIV/Aids and subjecting them to prosecutions and discrimination that individuals with other diseases do not experience, Ros-Lehtinen says in her video. If Florida were to conduct the assessment, legislators would have to address GARY G. DEBAUN, PETITIONER, V. THE STATE OF FLORIDA, RESPONDENT Case No.: Date certiorari accepted: April 3, 2014 Case type: Criminal, HIV disclosure Court: Florida Supreme Court Author of opinion below: Judge Linda Ann Wells Lawyers for petitioner: Carlos J. Martinez, Brian Lee Ellison and Alan Eckstein, Office of the Public Defender, Miami-Dade County Lawyers for respondent: Pamela Jo Bondi and Joanne Diez, Office of the Attorney General, Tallahassee Panel: Wells, Chief Judge Frank A. Shepherd and Judge Barbara Lagoa Originating court: Third District Court of Appeal this fact: It s a felony to violate the HIV disclosure law, but only a misdemeanor to withhold information about other sexually transmitted diseases. NEW YORK CASE Courts have been slow to board the HIV decriminalization band wagon. But in November, a New York appellate court ruled that an HIV-positive Syracuse man who had sex with an unsuspecting partner could not be charged with first-degree reckless endangerment. The defendant s conduct didn t create a grave risk of death an element of the offense because carrying HIV is no longer tantamount to a death sentence, according to the Appellate Division, Fourth Department. No such discussion appears in the decisions the Florida Supreme Court will review in the Debaun case. The dissenter from the Third District panel opinion, Chief Judge Frank Shepherd, would encourage the high court to home in on the plain meaning of the HIV disclosure law. To Shepherd, that requires throwing out the charges against Debaun. He wrote, The focus of the majority obscures the real issue: What is the meaning of sexual intercourse.