“These guys were modern-day pharaohs in a weird way – putting up buildings that changed the landscape; gigantic projects that no one thought could be done’
The Reichmann family has climbed higher than almost anyone. They were named the fourth richest family in the world before the fortunes of the visionary Canadian tycoons declined, to the point that their flagship company went bankrupt in the 1990s.
Once the talk of the town – of many towns, in many countries – the family whose every handshake seemed to make headlines has since been reclusive; On Monday, however, several members of the Reichmann clan will be in court to settle a messy family feud.
In Reichmann v. Reichmann, Abraham Reichmann is suing his parents, Ralph and Ada Reichmann, and several family companies.
Abraham, an ordained rabbi, filed his lawsuit in 2014 – complaining he was financially cut off by his parents – but only now is the trial finally scheduled.
This is a matter that many thought would be settled quietly. The clan had a penchant for privacy.
“The family has always been extremely cautious about their wealth,” said Dimitry Anastakis, professor of Canadian business history at the University of Toronto’s Rotman School of Management.
“They weren’t as flashy, they weren’t as hyped, and they certainly weren’t as notorious as so many billionaires are today with their spending habits.”
They certainly weren’t as notorious as so many billionaires are today.
Even a judge who heard pretrial motions on the case in 2015 offered advice from the bench: “This case calls for a settlement.”
It shouldn’t be.
The feud that rocks this branch of the Reichmann family tree has been quietly ugly and irreconcilable.
The Reichmann patriarch, Samuel, left Hungary for Austria in the 1920s, where Albert, Paul and Ralph were born. The Orthodox Jewish family fled Europe before World War II and the Holocaust and two more sons were born before the family emigrated from Morocco to Canada in 1956.
Ralph, now in his mid-90s, is one of three brothers who built a property development company, Olympia & York, into a global business of enormous proportions.
The company was led by Paul who pushed a big vision.
“Growing from modest means to become one of the biggest developers in the world is a great Canadian story,” said Anastakis.
“Their buildings in London, New York, Toronto, leave a huge mark. These guys were modern-day pharaohs in a weird way – putting up buildings that changed the landscape; gigantic projects no one thought they could do. .
From the 1970s through the 1990s, the Reichmann brothers, as they were collectively known, became household names for their business empire – its incredible rise and confusing fall.
In Toronto, they built First Canadian Place in 1975, the tallest completed skyscraper in Canada, as the anchor of the city’s financial district. Other rounds followed.
They owned the World Financial Center in New York, a shopping and office complex in Manhattan across from the World Trade Center.
In London, England, they created Canary Wharf, a historic development, from scratch. The family is said to have been launched on the plan in the 1980s directly by British Prime Minister Margaret Thatcher.
A cluster of gleaming office towers has been erected in London’s Docklands, transforming it into a global financial hub. As a nod to the family home, the master tower, the tallest building in the UK at the time, is called One Canada Square.
The Reichmann brothers also held controlling or substantial stakes in major publicly traded companies, including Gulf Canada, Abitibi Price, and GW Utilities.
During the recession of the 1990s their financial commitment to Canary Wharf extended their business and Olympia & York declared bankruptcy and the family lost control of the project.
Paul, the pack leader, died in 2013 at the age of 83.
Since their financial troubles and partial recovery, the family’s relationship has been more modest, as far as is known, and rarely makes headlines.
One thing this trial has already clarified is that although the Reichmanns have lost their ultra-rich status, they remain very wealthy.
Branches of the clan created family trusts. Part of Ralph and Ada Reichmann’s arrangement, according to court documents, was a holding company, with them serving as directors and officers and their children and grandchildren joining them as shareholders.
This included Abraham, who is now around 60 years old.
“For about 30 years, Abraham received large sums of money from his parents,” Frank Newbould, then an Ontario Superior Court judge hearing an interim motion in the case, said in a 2015 ruling.
There were monthly donations of $26,000 from her parents, written into their personal checking accounts from 2003 to 2012; monthly payments of approximately $14,000 from a business account from 1996 to 2012; and $2.1 million from trust dividends in 2012, among other payments, were heard in court.
The idea of airing the family’s dirty laundry in public will turn poor Paul into his grave.
Support ended abruptly soon after.
“What exactly caused the unfortunate family breakdown is not at all clear from the record,” Newbould wrote in a 2015 ruling.
“What is known is that until 2014 his parents were very generous to him and to other of their children. His parents, by all accounts, are very wealthy. His parents say the payments to Abraham were gifts In 2014, the payments to Abraham ceased for the reason, as admitted by Ralph, that he did not want to continue making payments that would be used to fund the litigation against him .
At the time, Abraham said he had a wife, ten children, four daughters-in-law and four grandchildren who depended on him for living expenses.
Pending the outcome of his trial, Abraham asked the court in 2015 to order the family’s holding company, Rada Holdings Inc., to continue making shareholder payments to him.
Rada’s money continued to flow to Abraham’s siblings, who were equal shareholders in the trust, the court heard.
“One can only infer that the reason for Abraham’s different treatment was because of his lawsuit against his parents. It was petty to say the least,” Newbould wrote. “Shareholders of a company have the right to expect to be treated the same with respect to dividends.”
As an interim order, Newbould ordered Rada to pay shareholders equally, based on their stakes.
There was little public activity on the file in the years that followed.
An order in the case was signed on February 8 by Judge Thomas McEwen – but it has been sealed, meaning it is not available to the public.
“The order relates only to the attorney-client relationship and not to the merits or conduct of this proceeding or, for that matter, any proceeding,” McEwen Hand wrote in a memo to the file.
Anastakis was surprised that the lawsuit went to trial.
He said the public optics of one family suing another family for money seems “unseemly”, especially for a clan whose empire was built by working together.
“Paul Reichmann has always been so discreet on these issues. The idea of airing the family’s dirty laundry in public will send poor Paul to his grave,” he said.
Tom Curry, representing Abraham Reichmann, and Luis Sarabia, representing Ralph and Ada Reichmann, both declined to comment on the case before trial.
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