A Hyde Park business executive is demanding more than $2.2 million from a Japanese insurance conglomerate for legal fees he incurred in a federal fraud investigation.
Jacob Frydman, the former CEO and director of United Realty Trust Inc. of Manhattan, sued Endurance American Insurance Co. for breach of contract for not reimbursing fees purportedly covered under an insurance policy. The suit was filed Dec. 9 in U.S. District Court, White Plains.
“Endurance”™s utterly unjustified refusal to pay these bona fide expenses, which are clearly covered by the policy,” Frydman said, “constitutes bad faith conduct by the insurer.”
United Realty was a real estate investment trust, a company that pays dividends to investors with income from real estate leases.
Frydman sold United Realty in 2015 to First Capital Real Estate Investments, founded by Suneet Singal. Frydman resigned as CEO and secretary, according to news reports, and was appointed chief investment officer.
United Realty had bought a six-year, $5 million officers and directors policy from Endurance, that covered certain losses incurred by executives. Endurance, which had an office in Purchase, was acquired in 2017 by the Japanese conglomerate Sompo International.
From 2016 to 2019, the U.S. Securities and Exchange Commission investigated Singal and First Capital.
A year ago, the SEC sued Singal, in part, for allegedly receiving more than $15 million in consideration, as part of the Untied Realty purchase, for 12 hotels he did not actually own. The case is pending in Manhattan federal court.
“As a result of wrongdoing by Singal,” Frydman claims, United ended up with no assets and he had to cover payments made by United in the SEC investigation.
Frydman claims he incurred $2,221,294 in legal fees and other expenses, responding to the SEC.
He has given Endurance an itemized account of his expenses, according to the complaint, but the company refuses to honor the insurance policy.
Sompo International spokeswoman Cara Gallagher declined to comment on the lawsuit.
Manhattan attorney Andrew W. Hayes represents Frydman.
