Malekan accuses his younger brother, Michael, of trying to steal his business. Michael asserts his brother has made a mess of things and a judge must strip him of control.
“This case is an emotional matter, steamed out of jealousy and spite,” Albert Malekan said in a New York state court filing in which he accuses Michael of fraud, breach of fiduciary duty, misappropriation of trade secrets and pocketing nearly $250,000 in excessive distributions.
Michael Malekan fired the first shot last year, when he accused Albert in a lawsuit of “grossly mismanaging” the family business, cheating him out of at least $1 million, siphoning company money for personal expenses, filing false tax returns and driving a prime retail property into default. When he broke with the family in 2019 to run the Great Neck, Long Island, fashion boutique Ooh La La, he claims Albert physically assaulted and choked him on Seventh Avenue.
“I want to destroy him,” Michael said, according to an affidavit filed by his brother-in-law, a partner in the family businesses, last month in New York state court.
Damage from the fight is spreading from the legal battlefield into the family’s prized properties.
Their building at 75 Greene St., which used to house Versace’s SoHo location, defaulted on its $8.5 million mortgage in April. Albert Malekan claimed lenders wouldn’t write a new loan because of the family feud, meaning the property faces foreclosure. Another building, 552 Seventh Ave., has a $12 million mortgage due in February, and Albert is “desperately” trying to refinance, his father, Elyahoo, said in an affidavit. Last year Albert sold 150 W. 36th St. for $6.5 million, city records show, which Michael described in a court filing as a “fire sale” struck to raise cash he was owed.
None of the Malekans would comment, nor would their attorneys. This article is based on court documents and city records.
Origin story
The Malekans came to America from Iran after that country’s 1979 revolution and settled on Long Island. Some of the city’s most successful real estate families hail from the community, including the Moinians, who also started out in the apparel business.
Albert Malekan and his father co-founded Alberto Makali in 1985, and it was quickly a success on and off the runway. Its eveningwear was sold at Bloomingdale’s, and in 2005 Women’s Wear Daily gave an award to a Makali-designed dress with pleated images recalling Vermeer’s Girl With a Pearl Earring. Michael Malekan was brought into the business after finishing college, thanks to “persuasion and pressure” from their father. Albert said in 1997 he gave his younger brother 20% of Makali, the same as his father and brother-in-law. Albert has a 40% share.
Around 2000 Albert Malekan began investing in real estate. City records show he acquired the 30,000-square-foot 552 Seventh Ave., near Times Square, for $4.6 million in 2002. Five years later he bought 466 Broome St. in SoHo for $13 million and 75 Greene St. a year after that for $5.5 million. In 2009 there was 150 W. 36th St. for $2.5 million, and in 2016 419 Lafayette St. for $4.5 million. Court records show Albert’s stake in the properties is typically 40% – at least twice that of Michael’s.
Albert Malekan managed the buildings and dealt with lenders, according to brother-in-law Shamram Golpanian, who handled bookkeeping. He also maintained control of the fashion label, with responsibility for designing clothes and traveling overseas. As chief of sales and marketing, Michael Malekan managed showrooms and retailers, and forecast consumer trends.
“Although we occasionally had small disagreements,” Golpanian testified, “we always discussed major decisions amongst ourselves.”
Small disagreements started turning into big ones. Starting in 2016 Michael Malekan’s behavior “drastically changed” when he began shouting and cursing at the office, Albert Malekan said. In 2018 Michael fired Makali’s salesforce, saying he could handle sales alone. Sales dropped.
His plan all along was to “steal” the fashion business, Albert contends. Michael secretly stocked the Ooh La La boutique with clothing based on Albert’s designs, patterns and size charts and made by Alberto Makali’s manufacturer. Michael even told clients that Makali was out of business and his shop was the successor, Albert said. Golpanian said Michael became “frequently threatening” and said he wanted to destroy Albert.
“I used to tell him, ‘You will also destroy yourself and me too,’” the brother-in-law said in his affidavit.
“I don’t care,” Michael Malekan said, according to the court document. “He has much more shares than me. It would destroy him more than me. I don’t care.”
In early 2019 Michael threw his keys and walked out of the office. That’s when Albert assaulted and choked him on the street, Michael claims, a charge Albert “strenuously” denies. Their father asked Albert and Golpanian to be patient, assuring them that Michael would eventually come back, but the rupture remained unhealed.
Michael Malekan, who is 54 years old according to Albert’s affidavit, asked a judge in October to appoint a receiver to oversee the family real estate businesses. Among other complaints, Michael objected to his brother imposing a 5% fee to manage his share of the family business. Albert, whose age couldn’t be learned, justified the management fee based on Michael’s “lack of participation.” He said Michael didn’t object when the fee was instituted, although he added they have mostly stopped communicating.
Meanwhile, the Alberto Makali store at 242 W. 36th St. remains open for business, and Judge Andrea Masley has given the brothers until January to produce evidence. Their 94-year-old father, Elyahoo Malekan, is siding with Albert. He said in an affidavit that his older son has always handled business affairs “professionally and effectively.”
“Unfortunately,” the patriarch added, “Michael did not leave ‘properly.’”
