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Kushner Companies Decides to Fight Tenants in State Court Rather Than Reveal Its Investors’ Identities

The move follows a federal judge’s ruling in favor of disclosure.

Jared Kushner’s family real estate company has backtracked on its effort to have a lawsuit filed against it by tenants of its Baltimore-area apartment complexes moved to federal court, after a judge ruled that this transfer would require it to reveal the identities of its investment partners.

The tenants’ class-action lawsuit was filed in the Circuit Court for Baltimore City in September, four months after a ProPublica article co-published with the New York Times Magazine described the highly aggressive tactics used by Kushner Companies to pursue tenants and former tenants over allegedly unpaid rent or broken leases. The lawsuit alleged that Kushner Companies, which owns 15 large apartment complexes in the Baltimore area, was improperly piling late fees and court fees onto tenants’ bills, often in excess of state limits, and using the threat of immediate eviction to force payment.

In early November, the various Kushner affiliates named in the lawsuit filed a request to have the case moved from the state court, where it would be heard by a Baltimore City jury, to the federal courts, where it would be heard by a jury drawn from a broader geographic swath of Maryland. To get approval for this request, Kushner Companies had to show that none of the investors it has brought in as partners on the complexes are based in Maryland.

The Kushner affiliates also filed a motion in federal court seeking to have the list of the investment partners shielded from public view, citing the high degree of media interest in Jared Kushner, who as Kushner Companies CEO presided over the purchase of the complexes before moving into the White House to serve as senior advisor to President Donald Trump, his father-in-law. “Given the tenor of the media’s reporting of this case, including politically-motivated innuendo no doubt intended to disparage the First Family, there is foreseeable risk of prejudice to the privacy rights and reputations of innocent private investors,” the Kushner lawyers wrote.

ProPublica and four other news organizations challenged the motion to keep the list of partners secret. And on Jan. 26, U.S. District Court Judge James K. Bredar ruled against the Kushner request for shielding the partners’ identities.

In that ruling, Bredar set a Feb. 9 deadline for the Kushner affiliates to submit the partners’ names to the court. But instead of doing so, the affiliates filed a short motion in federal court today asking to have the case moved back to the Circuit Court for Baltimore City. The aborted transfer has effectively resulted in a three-month delay in the tenants’ claims being heard.

Kushner Companies’ reluctance to disclose its partners in the complexes, which were purchased in 2012 and the years following, comes amidst new revelations about the company’s international investment ties. The New York Times reported last month that Kushner Companies last spring secured a $30 million equity investment in the Baltimore complexes and others of its holdings from Menora Mivtachim, a large Israeli insurer, just as Jared Kushner was about to make his first official trip to Israel as Trump’s designated broker of Israeli-Palestinian negotiations. Also last month, a New Yorker article described the Kushner Companies’ aggressive pursuit of Chinese investors in its real estate ventures. There has also been widespread scrutiny of a meeting in December 2016 between Jared Kushner and the head of a Russian state-owned bank, which may or may not have involved the matter of Russian investment in the Kushner Companies’ debt-strapped trophy building in New York, 666 Fifth Avenue.

Asked to elaborate on the decision this afternoon, Kushner Companies spokeswoman Christine Taylor said simply, “Our counsel on this matter has determined that the case should be remanded to state court.”

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