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Judge levies $85 million judgment against Wilfs

Mike Mullen//September 24, 2013//

Judge levies $85 million judgment against Wilfs

Mike Mullen//September 24, 2013//

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Zygi Wilf
Zygi Wilf and two of his brothers would be forced to pay $85 million under a judge’s order. (file photo: Peter Bartz-Gallagher)

A New Jersey judge’s award of $85 million against brothers Zygi and Mark Wilf is a troubling development for the  Minnesota Vikings owners, but not for the state, which still considers the team owners financially viable partners on their planned $975 million joint public-private stadium project.

Heading into yesterday’s court hearing, the fact that the Wilfs had lost their civil racketeering and fraud lawsuit was not in doubt, but the question remained of how much Judge Deanne Wilson would choose to award the plaintiffs in that case. In their complaint against the Wilfs, former business partners Ada Reichmann and Josef Halpern claimed the brothers had systematically cheated them out of revenues in a New Jersey real estate deal that dates back to the 1980s.

Monday’s award against the Wilfs includes $48 million in compensatory damages and $36 million in punitive damages. Should Wilson’s order stand, Mark and Leonard Wilf, a cousin of Zygi and Mark Wilf who was also a co-defendant, would each be responsible for paying out 20 percent of the damages, while Zygi would be on the hook for the remaining 60 percent.

In her original finding against the Wilfs, Wilson was harshly critical of the family, saying they had exhibited “bad faith and evil motive” in their dealings with the plaintiffs. Wilson’s words inspired Gov. Mark Dayton to call for a final “due diligence” review of the brothers’ finances, after which the Minnesota Sports Facilities Authority (MSFA) hired attorneys and accountants to assess the Wilfs’ financial state. Following the release of financial documents and assurances from National Football League commissioner Roger Goodell, who pledged to stand by the league’s $200 million loan offer to help fund the team’s obligation toward the new stadium, MSFA chair Michele Kelm-Helgen declared the Wilfs financially sound, even in the event of a “worst-case scenario” relating to the lawsuit.

Kelm-Helgen seemed similarly unfazed by yesterday’s news, telling Minnesota Public Radio that the stadium panel remains “very comfortable” in its beliefs that the Wilfs have sufficient resources to contribute toward stadium construction. The Wilfs’ defense attorney, Shep Guryan, meanwhile, was less sanguine about the finding, and said the brothers would appeal Wilson’s order.

Just hours before the judgment was released, Minnesota Management and Budget (MMB) officials signaled that the state is prepared to move forward on the new facility. As of Monday, MMB issued a request for proposals (RFP) for underwriting services on bonds that will be issued for the $498 million worth of public funds that will be dedicated toward construction. As part of the release, MMB Commissioner Jim Schowalter made clear that accepting proposals did not mean the state had entered into any binding funding or spending agreement.

“This does not commit the State to enter into any sort of financing,” Schowalter said.

The state and the Vikings organization are still negotiating a final agreement, with the team’s potential use of personal seat licenses (PSLs) to fund its obligation toward stadium costs appearing to be a major sticking point as the two sides attempt to strike a deal.

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