A feud splitting one of Pittsburgh's best-known real estate families went public this week as Andrew and Lawrence Gumberg filed a lawsuit accusing their older brother Ira of misappropriating millions from joint holdings worth $500 million.
The two younger Gumbergs claim Ira Gumberg and Braddock Hills-based J.J. Gumberg Co., a company founded by their grandfather, misappropriated "at least $13.5 million" belonging to Gumberg family partnerships from 2000 to 2007. Of that amount, "at least $4.7 million has been improperly withheld" from Andrew and Lawrence Gumberg, the suit states, and the brothers "believe and aver that the actual losses are substantially greater."
Ira Gumberg, J.J. Gumberg's president and chief executive officer, could not be reached for comment but privately held J.J. Gumberg issued a release referring to the younger brothers as "two disgruntled partners" who "believe they can force a buyout of their interests on their terms through a lawsuit."
Andrew and Lawrence Gumberg could not be reached for comment. Both work for separate real estate companies in Florida and Pittsburgh. Their lawyer also declined comment.
J.J. Gumberg, founded in the early half of the 20th century, controls 15 million square feet of shopping centers around the country, as well as the former Lord & Taylor department store in Downtiown Pittsburgh.
Ira, Andrew and Lawrence are all sons of Stanley Gumberg, the 81-year-old chairman of J.J. Gumberg and the last of a generation of old-school real estate executives who redeveloped Pittsburgh's landscape in the post-World War II period.
Under Stanley Gumberg's direction, the developer was responsible for many of the region's first shopping villages in Cranberry, Leetsdale and Pittsburgh's South Side. It was Stanley's father, Joseph, who founded the company in 1929.
Ira Gumberg is now controlling shareholder in the company, as well as president and CEO. His brothers Andrew and Lawrence relinquished their minority stakes of the company in 1992 and 2006, respectively, but still have stakes in some of the family partnerships, according to the suit.
Their case centers on a total of 17 family real estate partnerships worth about $500 million, according to the lawsuit. Since 2000, they claim, all cash from these partnerships were commingled in a single bank account controlled by Ira Gumberg and mixed with receipts from other real estate managed by J.J. Gumberg, other businesses controlled by Ira Gumberg, nonreal estate related businesses and J.J. Gumberg's own revenues. J.J. Gumberg and Ira Gumberg, the suit claims, used money from this single account for Mr. Gumberg's "personal benefit, in gross violation of his fiduciary duty."
The company, in its release, claims Ira Gumberg tried to settle this family conflict through a settlement.
But the two younger brothers argue in their suit they made "repeated" demands for a full accounting of the main bank account and any activities funded with that money as far back as Jan. 1, 2000.
The company and Mr. Gumberg "refused to comply," they claim.