Other Complex Litigation
In County of Nassau v. Hotels.com, L.P., No. 2:06-cv-5724 (ADS) (E.D.N.Y.) Zwerling Schachter represents Nassau County (NY) in a class action seeking to recover unpaid taxes from internet-based hotel reservation companies on behalf of a class consisting of all New York counties and municipalities.
Zwerling Schachter represented current and former Century 21 Real Estate franchisees ("Century 21") against Realogy Corporation, the successor in interest to the real estate division of Cendant Corporation ("Cendant"). The focus of this case was defendants’ elimination of support services to plaintiffs; defendants’ improper diversion of funds from Century 21 and its franchisees; and defendants’ diversion of funds and resources in order to promote their company-owned real estate entities at the expense of plaintiffs.
The actions complained of include:
Elimination of Support Services. Upon acquiring Century 21, Cendant eliminated Century 21’s regional offices, reduced support staff from over 5000 employees to fewer than 300, eliminated exclusive referral services, and reduced or eliminated various other support services.
Misuse of Funds. Defendants failed to use National Advertising Fund (“NAF”) funds for the exclusive benefit of Century 21 franchisees despite the fact that the fund is a trust to be used for the exclusive benefit of franchisees and all franchisees contribute 2% of their gross revenue to the NAF fund for advertising. Defendants also misuse franchisees’ service fees, despite the fact that all franchisees pay 6% of their gross revenue earned, derived or received as a service fee for support services.
As a result of Defendants’ actions, Century 21's ranking in the real estate market has dropped from first to approximately sixth, based upon average sale price and total dollar volume. Franchisees seek the return of misappropriated funds and damages for the elimination/reduction in services, as well as lost profits.
Zwerling Schachter achieved a settlement involving significant therapeutic remedies, as well as a settlement fund of $17 million.