Andrew Rubin, Esq.

New York breach of contract claims can reach millions of dollars

Because all breach of contract claims are different, the financial remuneration involved in winning a suit can vary. Some breach of contract claims are for relatively modest amounts; others can be in the millions. One New Jersey case pending in Bankruptcy Court falls into the latter categor, and involves back pay that the plaintiff claims has been withheld by the defendant, a government entity.

The lawsuit has been filed on behalf of a financial services company that oversaw the finances for a hotel whose governing body has now filed for bankruptcy. The financial company alleges that it is owed in excess of $1.5 million for work done over the past few years. It asserts that the original contract with the hotel, which was signed in 2000, must be honored by the governing body.

However, the defending entity that oversaw the governance of the hotel claims that the original contract was not valid, and that all development, deferred and incentive fees from 2011 to the present need not be paid to the financial company. Their statement is based on a law in New Jersey that ostensibly says municipal governments cannot enter into several-year contracts, as happened in this case, without an exemption. Thus, the defending entity is asking the courts to make a determination. In addition, the defendant reportedly made allegations that the financial company provided misleading projections that negatively impacted the success of the hotel.

This complicated case involving two very different viewpoints provides a prime example of the need for legal help to interpret a contractual agreement between two parties. Breach of contract claims always require serious consideration and documentation. If the company suing the now-defunct hotel governance body wins the suit in a court, or a settlement is reached before trial, the gains could be substantial.

Source:, "Former Trenton hotel financial adviser seeks back payment of more than $1.5M", Jenna Pizzi, July 10, 2014

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