Two ex-partners of defunct Gersten Savage are suing the law firm's former managing partner, claiming he used the firm "as his personal piggy bank, taking out whatever funds he needed" for personal expenses for himself and his wife and withholding compensation due the firm's other lawyers.
David Danovitch and John Riley sued Gersten Savage, a former corporate and litigation firm, and its former managing partner, Jay Kaplowitz, and his wife, Sheila Kaplowitz, in Manhattan Supreme Court, collectively seeking more than $1.16 million in compensatory damages and $5 million in punitive damages in Danovitch v. Gersten Savage, 650569/2013 (See Complaint).
Meanwhile, in their own suit filed last month, Jay and Sheila Kaplowitz allege Danovitch has refused to acknowledge his share of liability for debts incurred on behalf of the firm. Kaplowitz's suit in Manhattan Supreme Court, Kaplowitz v. Danovitch, 650575/2013, seeks a declaration of the parties' share of liability for financial obligations (See Complaint).
Gersten Savage was founded in 1977, grew to about 20 lawyers and folded last year, unable to pay hundreds of thousands of dollars owed under its lease at 600 Lexington Ave., according to court papers.
Subtenant lawyers who sued Gersten Savage and its partners last year (NYLJ, Oct. 15, 2012), alleging the firm induced them to rent without disclosing its plans to dissolve, were forced to leave earlier this year after Gersten Savage defaulted on the lease, said Patricia Grant, of Grant + Appelbaum.
Her firm and another subtenant, Virginia LoPreto, have found other office space but are proceeding with their suit seeking damages against Gersten Savage and ex-partners Kaplowitz and Arthur Marcus, Grant said.
Late last month, feuding former partners filed their lawsuits within a day of one another.
Danovitch and Riley said in their suit that they intend to seek an order of attachment to prevent the defendants from transferring proceeds from the sale of their Upper East Side townhouse after it was listed for nearly $7 million.
The suit claims that Danovitch, recruited as a contract partner, transitioned in 2007 to equity partner, a role in which he would receive a percentage of Gersten Savage's profits and a portion of his collections.
But the first year Danovitch was an equity partner, his compensation amounted to 18 percent of his collections rather than the 33 percent he would have received as a contract partner, his suit claims.