NEW YORK, June 7, 2011 /PRNewswire/ -- Bickel & Brewer announced today the filing of a lawsuit against GE Business Financial Services ("GE Financial") that accuses the company of racial and religious discrimination against two Jewish-American businessmen, Albert and Harris Schwartzberg. The Schwartzbergs are long-time real estate professionals and founders of New Louisiana Holdings, LLC ("New Louisiana") – a company that in the wake of Hurricane Katrina acquired and began to operate 12 skilled nursing and assisted living facilities located in and around Louisiana.
Filed recently in the United States District Court for the Southern District of New York, on behalf of New Louisiana and the facilities, the lawsuit alleges that the Schwartzbergs were subjected to a vicious pattern of anti-Semitic behavior at the hands of their GE Financial loan administrator, Richard Arrowsmith. The lawsuit claims Arrowsmith pursued intentionally discriminatory credit practices – causing significant damage to the Schwartzbergs' promising enterprise. The suit also names as defendants GE Healthcare Financial Services, General Electric Capital Corporation, CIT Healthcare, Marathon Structured Finance Fund and Arrowsmith individually, and seeks tens of millions of dollars in damages.
"Our clients assert that they were unlawfully discriminated against solely because of their Jewish heritage," says William A. Brewer III, partner at Bickel & Brewer and lead counsel for the Schwartzbergs and New Louisiana. "In the process, they believe they were subjected to unfair and unlawful lending practices."
The complaint states that, in 2006, New Louisiana acquired the right to operate the facilities and entered into financing arrangements to help fund the venture. For two years, the relationship between the company and a consortium of lenders – led by Merrill Lynch Capital – proceeded without issue, according to the suit. The lawsuit says GE Financial acquired the lead position in the loan portfolio from Merrill Lynch Capital in 2008, and fatefully assigned the account to Arrowsmith. The lawsuit claims that almost immediately, Arrowsmith began to demonstrate an intense dislike for the Schwartzbergs – fueled by his animus toward what he called, "those people." Plaintiffs assert that Arrowsmith made repeated bigoted statements about the Schwartzbergs and disparaging remarks about their businesses, and used technical, curable defaults to harass New Louisiana, deny it the working capital it needed to operate the facilities, and force the Schwartzberg family to incur unnecessary financial expense.
The complaint alleges that although the Schwartzbergs had made all principal and interest loan payments on time, Arrowsmith had no intention of administering the loan agreements in good faith, but was intent on causing damage to the Schwartzbergs and their businesses – a fact he allegedly admitted on more than one occasion. Thus, Arrowsmith declared the loan in technical default and reduced the funds available for borrowing by increasing the required reserves.
The complaint asserts that GE Financial failed to restrain Arrowsmith and put a stop to his discriminatory conduct, despite being informed of his repeated anti-Semitic comments and motives. According to the legal filing, "Arrowsmith is related to the infamous mega-millionaire Harold Noel Arrowsmith, the most notorious and aggressive anti-Semite in our country's history." Harold Arrowsmith is the former chief financial backer of the American Nazi Party.
"We believe GE Financial not only failed to control Richard Arrowsmith and his improperly-motivated actions against our clients, but actually looked the other way despite their knowledge of his conduct," Brewer says. "As a result, New Louisiana suffered millions of dollars in operating losses – and the reputation and goodwill previously associated with the Schwartzberg-affiliated businesses have been permanently harmed."
To view a copy of the legal filing, click here.
About New Louisiana Holdings, LLC
New Louisiana is a limited liability company organized and existing under the laws of Louisiana with its principal place of business in Baton Rouge.
About Bickel & Brewer:
Bickel & Brewer has earned a reputation as one of the most successful law firms in the United States practicing exclusively in the field of complex commercial litigation and dispute resolution. With offices in New York and Dallas, Bickel & Brewer represents a wide spectrum of industry leaders – from entrepreneurs to Fortune 500 corporations – facing the most challenging of legal issues. Visit Bickel & Brewer at www.bickelbrewer.com
SOURCE Bickel & Brewer