NEW YORK — It’s the family feud that won’t go away.
This story first appeared in the August 27, 2002 issue of WWD. Subscribe Today.
Former Barneys co-chairman Bob Pressman, incensed over a recent lower court judgment against him that he cheated his sisters out of $11 million, has filed a countersuit against his family members in White Plains, N.Y., alleging “fraud, self-dealing and unjust enrichment.”
The order by N.Y. State Court Justice Karla Moskowitz awarded the two sisters — Elizabeth Pressman-Neubardt and Nancy Pressman Dressler — $11.3 million, which is comprised of $7.3 million in damages and $4 million in pre-judgment interest.
Pressman, currently a real estate consultant, on Monday slammed the court decision against him, handed down in July, and is appealing. He said the court in “its rush to justice, stated prior to the trial’s commencement that it would rule from the bench at the end of the trial in spite of the enormous task of weighing 10 days of trial evidence and lengthy briefs submitted on the trial’s last day.”
In Moskowitz’s bench ruling, which was first reported in The New York Post on Monday, she said, “I find that the testimony is overwhelming and the documentary evidence is overwhelming that Mr. Pressman made the decisions as to how the money would flow and who would get the money.”
As for the action for breach of fiduciary duty and self-dealing, Moskowitz said, “It is clear from the findings of fact that this occurred over a long period of time while this scheme was going on, both the breach of the duty and the self-dealing, in continually writing checks, transferring of money at all times during this period by Bob Pressman. There is absolutely no evidence before me that anyone other than Bob Pressman either signed checks or controlled distributions.”
With all the legal manuevering, it’s sure to take years before anything gets resolved. Members of the Pressman family, which ran Barneys until it went bankrupt in 1996 and were ousted as part of the restructuring, have been fighting for years, even before losing Barneys.
Bob Pressman is on vacation and could not be reached for comment directly. Through a spokesman, he denied swiping money from a family trust fund to build his house in Connecticut, which he said was built 12 years before any disbursement of the funds was made. “The allegation is absurd,” said the spokesman.
The spokesman added that Pressman couldn’t have taken funds from his sisters since he was one of four family trustees on the board and didn’t have control of the fund. The other trustees were his brother, Gene, also a former Barneys co-chairman, as well as his mother and father, the late Fred Pressman. “It takes a majority vote to make a disbursement,” the spokesman said. The sisters were buyers at the store.
Gene Pressman said of the lower court decision: “I support my sisters, and I’m glad it’s over. I don’t like family feuds.”
Michael Silberberg, of Morvillo, Abramowitz, Grand, Iason & Silberberg, counsel for the Pressman sisters, said that two weeks ago Bob Pressman sought a stay of execution pending an appeal. “A single judge in the appellate division heard the application and denied it. A full panel will hear the application within the next week or so. It will be decided based on paper submissions. We will vigorously contest his appeal,” he said.
Silberberg said that he has not yet seen the lawsuit filed last week against family members.
According to the bench ruling, Pressman claimed in court testimony that the decisions made about the financing of Barneys was made in “consultation with his father.” Moskowitz said, “His father is not here to testify, and everyone else’s testimony was that his father and he basically stopped talking. And when they were talking, [Bob Pressman] did not share with his father the finances and the ways, the devices that he had developed to avoid paying income taxes and increase the amounts of money over and beyond the salaries that Barneys paid.”
Fred Pressman died in July 1996 and excluded Bob Pressman from his will. As reported in June 1998, the will, dated May 22, 1996, left the estate to his wife Phyllis, who was named the executor. The will also stated that if Phyllis should predecease him, the estate would be divided among his son Gene, and two daughters, Elizabeth and Nancy. The will included a provision stating, “I make no provision hereunder for my son Robert L. Pressman, for good and sufficient reason.”