By Jorge Casuso

February 26, 2019 -- A major Santa Monica apartment owner won't get back the properties he claimed had been fraudulently taken and sold by investors, two Superior Court judges ruled in separate cases on Friday.

The rulings could put an end to a five-year quest by Neil Shekhter and NMS Properties, Inc. to reclaim nine properties included in a portfolio that boasted some two dozen apartment buildings, most of them in Downtown Santa Monica.

The legal battle stems from a 2014 lawsuit filed by Shekhter alleging the multi-billion dollar Boston-based investor AEW owes him $720 million for violating the terms of an agreement.

On Friday, Santa Monica Superior Court Judge Lawrence Cho issued a tentative ruling -- made final on Tuesday -- rejecting the plaintiffs' claims that the sale of the properties should be voided.

The issue already had been decided by a trial court and affirmed by a Court of Appeal, the judge said.

"The issue of whether (the plaintiffs) had any right to own, control, or prevent the sale of the Properties was clearly addressed" by the Court of Appeal, Cho wrote in Friday's decision.

"The issue was not only necessarily addressed, but was clearly addressed by the Court of Appeal."

Superior Court Judge Monica Bachner dealt a separate blow to Shekhter's efforts on Friday.

In her ruling, Bachner, who is currently hearing the case sent back by the appeals court, rejected Shekhter's efforts to rescind the 2016 sale of the nine NMS properties ("Major Santa Monica Developer Tries to Get Properties Back," February 8, 2019).

According to the complaint AEW Capital, the investor that had gained control of the properties, sold it to buyers who were not bona fide purchasers, according to the plaintiffs' fraud claim.

AEW refused an offer to purchase the properties from a legitimate third party buyer and instead sold them "in an insider, below-market transaction," the plaintiffs claimed.

In her ruling Friday, Bachner echoed retired Superior Court Judge Suzanne Bruguera's findings in 2016 when she ordered Shekhter to cede control of the properties and pay the defendant's attorneys’ fees.

Bruguera found that Shekhter had fabricated and destroyed evidence and committed perjury in his case against AEW ("Court Dispute Between Developers Spills into Santa Monica City Council Chambers," December 2, 2016).

"All of the Plaintiffs," Bachner wrote, "engaged in widespread discovery misconduct that infected the entire proceedings and that irreparably damaged the Defendants’ ability to defend the litigation and to pursue cross-claims.

"Alternatively, the Court exercises its own independent discretion, based upon its examination of the record, to find that terminating sanctions should be imposed," she wrote.

The current lawsuit was filed after a Court of Appeal judge reversed the prior dismissal, allowing the plaintiffs to take AEW to court on their fraud claim.

Eric Rose, a spokesperson for NMS, said the plaintiffs plan to file another appeal.

“We respectfully disagree with the judge’s decision and plan to appeal," Rose said in a statement.

"We still feel very good about our case, and we feel very confident in our positions and prevailing.”

James Fogelman, a partner at Gibson Dunn who represents AEW, said the plaintiffs have run out of options.

"There are now three judges and a court of appeal that have ruled against NMS on these claims," Fogelman said.

"The properties were never NMS' to begin with and belong to someone else now," he said.