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Becker & Poliakoff Faces Malpractice Suit Over Bankrupt Mall

, Daily Business Review

Friday the 13th brought bad news for Becker & Poliakoff, which was named in a multimillion-dollar malpractice suit by a powerful Chinese conglomerate.

The firm and attorney Pamela Anselmo, who left the law firm in 2014, are being sued by Tangshan Ganglu Iron & Steel Co. Ltd., which claims sloppy legal work by Becker & Poliakoff helped cost it at least $140 million on its failed redevelopment of Plantation's shuttered Fashion Mall property.

Becker & Poliakoff "flatly denies it ever represented Tangshan Ganglu" and claimed it met with the company's chief executive "on at most a handful of occasions." The firm claims the lawsuit assigned to U.S. District Judge William P. Dimitrouleas is a baseless attempt to recover millions after Tangshan Ganglu emerged on the losing side of a bankruptcy battle.

The complaint contends the firm represented the Chinese investor as well as an accused swindler who, instead of guiding its U.S. investments, diverted millions from the project.

The plaintiff is one of China's largest companies — a conglomerate with more than 10,000 employees engaged in mining, steelmaking and related businesses. Founder Zhen Zeng Du alleges Becker & Poliakoff had conflicting interests when it represented him, his company and several others created by minority partner Wei Chen.

Chen formed and managed three companies, Mapuche LLC, U.S. Capital Holdings LLC and U.S. Capital/Fashion Mall LLC, which were supposed to transform the mall into 321 North, a sprawling mixed-used development with retail, housing, dining and entertainment.

The project failed after hurricane damage, foreclosure and a fight between Du and Chen for control of the three development companies. That dispute ended when Chen put all three companies into Chapter 7 bankruptcy over Du's objections. Du argued he invested more than $100 million in the project, and the move would cost him millions.

The property sold for $38 million to Encore Housing Opportunity Fund at a bankruptcy auction in March 2015, but news later emerged that Chen appeared on a Chinese government list of alleged economic fugitives for reportedly embezzling $120,000 from a former employer before moving to the U.S.

Du claimed he started investing in the beleaguered Broward County project in 2004 as part of an entry strategy into U.S. and Latin American markets. His suit alleges Becker & Poliakoff represented Chen and the three companies starting in 2005 as well as Du. In 2005, for instance, the firm represented Du and all other parties when it drafted an operating agreement that laid out the ownership structure for 321 North, the suit claims.

For years, corporate documents described Du's company as the majority shareholder with a 99 percent stake until the law firm reportedly filed a "secret third amended" document with a forged signature giving Chen control of the project. After a nasty legal battle, Broward Circuit Judge Jack Tuter ruled Du's signature had been forged on a corporate document giving Chen control of the project.

No Representation

"Inexplicably ... in or around April of 2010 B&P and Anselmo drafted corporate documents which completely destroyed plaintiff's control over the 321 North Project. In particular, B&P and Anselmo created a new operating agreement for Mapuche, which removed essentially all the protections and control over management of the project provided for in the second operating agreement," according to the suit filed by Lawrence Kellogg of Levine Kellogg Lehman Schneider + Grossman in Miami. "They did so without discussing the change with Mr. Du or Tangshan Ganglu, without showing the proposed amended operating agreement to them and without even providing a signature line for Tangshan Ganglu, the 99 percent member, or Mr. Du, the co-manager."

Kellogg declined comment.

Anselmo, who is no longer with Becker & Poliakoff, did not respond to a request for comment by deadline. She left the firm in 2014 to join Hinshaw & Culbertson in Fort Lauderdale.
Becker & Poliakoff, meanwhile retained Bob Critton of Critton Luttier Coleman in West Palm Beach to handle the litigation.

"Ganglu never requested that Becker & Poliakoff represent it," Critton said in a statement.
He said Tangshan Ganglu never signed a representation agreement with Becker & Poliakoff, never received any legal bills or invoices from the firm and didn't pay for any services. Instead, he said the firm worked with in-house counsel to represent the three related companies managed by Chen.
"In-house counsel not only provided the assignments but reviewed the work, which was requested," Critton said. "The meritless lawsuit against Becker & Poliakoff seeks the very same damages that Ganglu claims as a creditor in the consolidated Chapter 7 bankruptcies. The Fashion Mall redevelopment project was an ongoing disaster from almost the beginning of the mid-2000s. It suffered through mismanagement, foreclosures, hurricanes, lawsuits and judgments. Ganglu is looking for a deep pocket to blame, rather than itself, for its claimed losses."

Boca Raton-based Encore Housing is mulling a high-end, mixed-use project with luxury housing, retail, restaurants and offices on the 33-acre property northwest of University Drive and Broward Boulevard.

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