Barclay Brothers Win Record Sanction in Appellate Court

An appellate court in New York has affirmed for our clients, Sir David Barclay and Sir Frederick Barclay, what is believed to be the largest sanction ever imposed in the State of New York, more than $1 million, including interest, for the Barclays and their co-defendants.

Several years ago, the Barclays (who own the London Telegraph newspaper and the Connaught, Claridge’s and Ritz hotels in London) were sued along with others (including real estate developer Howard Ronson) by Sheldon Solow—one of New York’s best-known developers with a history of aggressive litigation tactics—for allegedly engaging in a massive real estate fraud involving a Manhattan office building. The defendants moved to dismiss and for sanctions, and both motions were granted in 2005. Thus began a multi-year battle to collect the sanctions, which the trial court ruled should be the amount of the defendants’ reasonable legal fees.

First there was a successful eight-day trial in which New York partner Jerry Katz was lead counsel, followed by countless legal maneuvers by Solow to avoid paying.

Then, on appeal to the Appellate Division, First Department, in Manhattan, Solow sought to pin the blame entirely on his former lawyer in the case, the now-imprisoned (and conveniently bankrupt) Marc Dreier.

By a vote of 5-0, the Appellate Division, in an opinion issued on Nov. 1, rejected Solow’s appeal in its entirety, citing “the untenable factual allegations in the complaint as well as the vexatious litigation history of Sheldon Solow,” and holding that the amount of legal fees sought was reasonable and supported by the record.

New York partner Jerry Katz argued the appeal for all of the defendants, and he was assisted by Jerry’s assistant Dawnne Jones.