Widow of Black Spruce Management co-founder battles company’s top executive

Natalia Legg, the widow of the late Black Spruce Management co-founder Oliver Legg, filed a 45-page complaint over the weekend, alleging Black Spruce Management co-founder and chief executive Joshua Gotlib, a close family friend who is also the trustee for Oliver Legg’s trust, misused the trust’s funds and made incorrect statements to Natalia about financial aspects of Black Spruce and its relationship to the trust.

The complaint does not specify a dollar amount being sought, although the allegations indicate a dispute over many millions. Black Spruce Management is a company that controls billions of dollars of real estate holdings and was one of the city’s most active buyers of multifamily real estate over the past two years.

Case LINK

Court filings represent the position of one party and are not necessarily accurate or complete. A member of the Legg family, in a statements to PincusCo, supported Gotlib.

The member, who asked that their name be withheld, wrote in a statement to PincusCo that: “We are deeply saddened that Natalia has chosen this course of action. We know Josh to be a trusted family friend and someone who was by Oliver’s side until his final days. We have full confidence in Josh and give him our ongoing support.”

A spokesperson for Black Spruce said in a statement that Joshua Gotlib and Oliver Legg, “were like brothers and built Black Spruce Management together before Mr. Legg’s life was cut short. Most importantly, Mr. Gotlib was there by Mr. Legg and his family’s side throughout his fight with cancer until the very end and through to this very day. Mr. Gotlib has remained a close and trusted partner with the Legg family. We are extremely confident that these untrue, lawyer-manufactured claims, will fail.”

Oliver Legg and Joshua Gotlib founded Black Spruce Management in 2009. Oliver became ill and in 2014 formed a trust for the benefit of Natalia and their daughter. He later died May 1, 2015, of a malignant brain tumor.

According to the complaint, several weeks after Oliver’s death, Natalia following Gotlib’s advise, signed a document on May 25, 2015, that shifted control of two management companies from a 50-50 arrangement to full control by Gotlib, who, according to the complaint, explained this arrangement would benefit Natalia and her daughter because the management companies at the time were not making money.

Natalia alleges now that that was a falsehood, and the new arrangement was created so that Gotlib could retain more of the management fees. The complaint alleges Gotlib used the trust money improperly in several instances including to partially finance the $27 million purchase in 2017 of a Brooklyn distressed portfolio that includes 166 Kingland Avenue in Greenpoint from Sylvester Smolarczyk’s SMK Property Management that was under pressure of foreclosure by Madison Realty Capital. According to the complaint, “The Trust has suffered at least $1.5 million of losses from the self-dealing loan.”

She also alleges he at least once used the trust’s funds to buy out partners, among other allegations.

The activity has, according to the complaint, “saddled the Trust with imprudent risks, adverse tax consequences, and liquidity problems, all of which caused losses and depressed returns for Natalia and her daughter.”

Direct link to the property’s ACRIS page.