JLL Sues Former Managing Directors For $2.8M In Unpaid Loans
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JLL is suing two of its former managing directors, claiming they owe the Chicago-based brokerage giant a combined $2.8M in unpaid loans.
In a legal complaint filed Thursday in U.S. District Court in Chicago, JLL alleges that former managing directors Jubeen Vaghefi and Dennis St. Romain have each failed to repay the balance of the $2.5M loans they received in May 2016 after leaving the firm in August and joining Walker & Dunlop. The two were high-level investment sales brokers based in South Florida.
JLL's deal was structured so if Vaghefi and St. Romain's team generated at least $2M a year for six years, the debt would be forgiven. JLL said it forgave the debt on the loan from 2016-2018, but by the time the pair resigned in early August, they each owed more than $1.4M.
As a condition of their 2016 pacts, the two agreed to pay back the outstanding balance 30 days after they left JLL. The brokerage giant said it hasn't received payment, which is why it decided to file the lawsuit, which requests repayment of the loan, accrued interest and attorneys' fees. The arrangements are somewhat common in the cutthroat world of brokerage, sources told Bisnow, used as signing bonuses to either lure or keep star brokers.
Vaghefi started at JLL in 2006, according to his LinkedIn profile, and was JLL's national practice leader for its multifamily investment sales group for the better part of a decade. He was promoted to international director in 2012, by which time he had already brokered more than $6.5B in real estate transactions. St. Romain joined JLL in 2010 after six years as CEO at Trade Street Capital LLC, according to his LinkedIn profile.
When the pair departed for Walker & Dunlop, the Maryland-based debt and investment sales brokerage, their new firm touted their combined $18B in deals closed and boasted that its property sales platform in Florida, now led by Vaghefi and St. Romain, "has become the premier team in the state."
Vaghefi and St. Romain could not be reached for comment. JLL and its attorney in the case, Foley & Lardner associate Patrick McMahon, both declined to comment.
"At the rate with which the combined JLL/HFF platform is losing professionals to competitor firms, it is not surprising they are attempting to use legal means to stop the departures," Walker & Dunlop Chairman and CEO Willy Walker said in a statement. "Unfortunately for JLL, we are in a people business and lawsuits undermine corporate culture, not enhance it. This alleged suit against two fantastic new members of the W&D team will be handled accordingly."
JLL's $2B acquisition of HFF, a real estate investment sales and debt services firm, became official July 1, a little more than a month before Vaghefi and St. Romain's departures.
Vaghefi and St. Romain signed new agreements with JLL in May 2016 — Vaghefi as an employee, St. Romain as a contractor reporting to Vaghefi — according to JLL, which attached their work agreements as exhibits to the complaint.
Those agreements included loans to the tune of $2.5M each, paid in cash later that month, JLL said in its complaint. In the attached agreements, JLL agreed to loan each broker $2.25M. It is unclear why there is a $250K discrepancy between the complaint and the exhibits.