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Monday April 22, 2024

Billions in LA real estate fuelled brothers’ epic court fight

The 2003 lawsuit already has been through 18 appeals, generations of attorneys and five judges in the Los Angeles Superior Court

By Our Correspondent
March 02, 2024
LOS ANGELES- CA, MARCH 2: Los Angeles Superior Court Stanley Mosk Courthouse March 2, 2004 in Los Angeles Hills, California. — AFP
LOS ANGELES- CA, MARCH 2: Los Angeles Superior Court Stanley Mosk Courthouse March 2, 2004 in Los Angeles Hills, California. — AFP 

LOS ANGELES: An obscure 21-year legal feud involving five brothers from India who have amassed a fortune in diamonds and Los Angeles real estate burst into public view this week with a multibillion-dollar US verdict that may be among the largest of the decade.

After a five-month trial, a jury ordered Haresh Jogani to pay his brothers Shashikant, Rajesh, Chetan and Shailesh Jogani more than $2.5 billion in damages and to divide up shares of their Southern California property empire — about 17,000 apartments worth billions more. The trial, over allegations that Haresh breached a longstanding partnership with his siblings, continues with a punitive damages hearing on Monday that could add to the award.

The 2003 lawsuit already has been through 18 appeals, generations of attorneys and five judges in the Los Angeles Superior Court. Making the case more unusual is that most multibillion-dollar verdicts in the US are against giant corporations. How much each brother ultimately walks away with turns on the ups and downs of the real estate market, with apartment prices having fallen from their 2022 peak after higher interest rates raised borrowing costs and cut into property values. Apartment prices averaged $329,000 a unit in January in the Los Angeles area, down 26% from a November 2022 high, according to MSCI Real Assets. Rick Richmond, the lawyer for defendant Haresh Jogani, declined to comment because the jury isn’t finished yet.

The Jogani family, natives of Gujarat, India, built a fortune in the global diamond trade, establishing outposts in Europe, Africa, the Middle East and North America. Shashikant “Shashi” Jogani moved at age 22 in 1969 to California, where he began a solo firm in the gem business and started to build a property portfolio, according to a complaint he filed in 2003. The properties suffered losses in the recession of the early 1990s, which worsened after the 1994 Northridge Earthquake killed 16 people in one of his buildings, leading Shashi to bring in his brothers as partners. The firm then embarked on a buying spree that eventually built the portfolio to roughly 17,000 apartment units with the brothers collaborating until Haresh “forcibly removed” his sibling from managing the firm and refused to pay him, according to Shashi Jogani’s complaint. The jury awarded $165 million in damages to brothers Chetan and Rajesh over Haresh’s breach of the diamond partnership, as well as $1.8 billion to Shashi, $234 million to Chetan and $360 million to Rajesh for breach of the real estate partnership. The jurors also concluded that Shashi, now 77 years old, owns 50% of the real estate partnership, followed by 24% for Haresh, 10% for Rajesh, 9.5% for Shailesh and 6.5% for Chetan, the youngest, who is now 62, according to Ross.