REAL ESTATE

Ziel Feldman’s HFZ Capital Sues Nir Meir For Embezzlement

HFZ founder Ziel Feldman and Nir Meir (iStock, HFZ/Illustration by Kevin Rebong for The Real Deal)

HFZ Capital Group’s Ziel Feldman says his former partner Nir Meir used their development firm’s bank account as a “personal piggy-bank” to bankroll his lavish lifestyle.

HFZ accused Meir of stealing $15 million via fraudulent credit card reimbursements and wire transfers, in a lawsuit filed April 6 in Suffolk County. The suit claimed Meir lived “well above his means” on HFZ’s dime and seeks $43 million in damages. Meir’s attorney described the allegations as a “desperate, last-ditch attempt” to pressure Meir and said the claims were without merit.

Meir allegedly used his position as managing partner at the now embattled firm — and his control of its finances — to divert money to his own pockets.

The suit said he transferred $5 million to himself from HFZ’s bank account between 2017 and 2020. During that time, he also allegedly asked for credit card reimbursements totalling more than $11 million. Rather than legitimate business expenses, the suit said Meir spent hundreds of thousands of dollars — if not millions — on “investment-grade” wine. He also allegedly forged documents in order to take ownership of a $45 million estate in Southampton that HFZ claims it owns.

“Meir’s looting of HFZ assets accelerated in recent years,” the suit said. He was able to conceal his actions “by virtue of his position at the company, which he used aggressively to ensure the compliance of HFZ’s employees by fostering a culture of fear and reprisals by Meir if staff members did not follow through on his directions.”

“They’re seeking to blame him as a scapegoat and we won’t tolerate it,” said Meir’s attorney, Larry Hutcher. He said Meir has paid more than $10 million in recent months to satisfy HFZ creditors. ‘We are the ones out there, acting in good faith and trying to deal with these issues.” He said Meir believes. HFZ owes him “in excess of $25 million” based on participation in development deals.

Meir was a managing principal at HFZ until December. That month, Feldman took over day-to-day management of the development firm. In a statement at the time, a spokesperson for Meir said he remained a “vested partner” in the firm, which he co-founded with Feldman in 2005.

HFZ did not give a reason for his departure at the time, but in the lawsuit said he was terminated when the extent of his “malfeasance for his personal benefit” came to light.

According to the complaint, Meir had been living “rent-free” in a $13 million apartment on the Upper West Side that was owned by HFZ. The suit said he was also living rent-free in the Southampton home, which was being shopped off market.

HFZ lender Monroe Capital tried to seize the Hamptons home, at 40 Meadow Lane, last year.

An entity tied to Monroe sued in December, alleging it held title to the property but Meir was blocking it from taking possession. Meir filed a countersuit in January, claiming he owned 95 percent of the property, and accusing Monroe and HFZ of scheming to fraudulently transfer the property to reduce Feldman’s debt. Monroe’s suit was discontinued in March.

In the latest suit, HFZ said it isn’t looking to stop the sale of the property but argued the “equity and surplus funds rightfully belong to HFZ.”

HFZ is facing a reckoning across its portfolio after making big bets before the market turned. The developer has been slammed by foreclosures and lawsuits from lenders, including CIM Group, which seized control of four condo projects last month.

Feldman and his wife, Helene, are personally on the hook for many loans tied to HFZ’s projects. HFZ’s biggest project is the XI, the Bjarke Ingels–designed XI condo and hotel spanning a full city block along the High Line.

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