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As previously reported here on FAA News, a second lawsuit has recently been filed in New Jersey Superior Court regarding the Atlantic City Pesach program fiasco.

As this fiasco continues to unfold, a judge has just ordered the Sheriff to seize the assets of the organizer of the program to repay a loan he got to finance his 2020 Pesach program, FAA News has learned.

In October 2019, Yitzchok Neger loaned Heshy Goldstein $250,000 for use in connection with his Pesach Program planned for 2020. Pursuant to the written Agreement, Goldstein was obligated to repay Neger $300,000 by no later than 10 days following Pesach 2020.

Specifically, pursuant to the Agreement, Goldstein agreed to use 50% of the customer deposits
from the 2020 Pesach Program to repay the loan. Additionally, Goldstein agreed to pay Neger 35% of the profits from the 2020 Pesach Program, and to give him a 35% interest in any equipment and other valuables that could be reused for future Pesach Programs.

In order to induce Neger to enter into the loan Agreement, Joel Goldstein and Yaakov Rotenberg signed on as personal guarantors of the loan, to repay $300,000 on or before April 27, 2020.

By December 2020, most of the loan remained outstanding. The parties went to Rav Chaim Meir Roth to adjudicate their claims. They signed an Arbitration Agreement which stipulated that the matter would be adjudicated before Rabbi Roth, and if need be, before Bais Din Zedek of Lakewood.

Specifically, the Arbitration Agreement stipulated:

"We, the litigants... accepted to settle all our legal claims and matters between us, including all the claims and all the counterclaims of the parties, before Rabbi Chaim Meir Roth and we undertake and absolve what should be ruled, whether it is a close interpretation of the law, whether interpretation and even a minor mistake in the matter, and we accepted to obey his ruling without any omission and appeal at all."

The parties had one session before Rabbi Roth with no settlement to the matter. Mr. Goldstein never disputed the debt, he just said he didn’t have any money. When Rabbi Roth asked to see his books, Mr. Goldstein refused, claiming he didn’t have any books (or they weren’t properly recorded). Rabbi Roth did not compel Mr. Goldstein to produce his records, and made no decision over the next 2 months.

By February 2021, Neger had recovered only $75,000 in connection with the Loan. This was not money given to him by Mr. Goldstein, rather this was the deposit that Goldstein paid to the hotel and the hotel refunded after the Pesach event was cancelled due to COVID. As Mr. Nager had laid out these funds directly to the hotel, the hotel refunded the monies directly back to him.

At that point, represented by Cherry Hill Attorney Jonathan L. Bender Esq., Neger filed a civil complaint in New Jersey Superior Court in Ocean County, naming as Defendants Hersh (Heshy) Goldstein, Aryeh Tours, LLC dba Deluxe Retreats, Joel M. Goldstein, and Yaakov Rotenberg.

The 5-count Complaint alleged; 1) breach of contract against H. Goldstein on the agreement, note and borrower guarantee; 2) breach of contract against J. Goldstein and Rotenberg on guarantees; 3) book account; 4) monies advanced; and 5) unjust enrichment.

On April 15, 2021, after none of the Defendants answered the Complaint, the Plaintiffs attorney requested that default judgement be entered against them.

That same day, Attorney Larry Loigman Esq. entered an appearance on behalf of Heshy Goldstein, Aryeh Tours, LLC, and Joel M. Goldstein, and filed a Motion to vacate the default judgement. Additionally, Loigman sought to uphold the arbitration agreement and to compel the matter back to Rabbi Roth for adjudication, and to stay the litigation pending the outcome of the arbitration.

Courts view arbitration with such favor that even an oral agreement to arbitrate a contract dispute may be enforced, Kimm v. Blisset.

Both the validity of the contract itself, and the arbitration clause, are properly subjects for the arbitrator, not the court, to decide, Goffe v. Foulke Management Corp.

Plaintiff’s filing of the complaint in the Superior Court thus violated the explicit agreement of the parties to submit “all our legal claims and matters between us” to an arbitration forum. The judgment obtained in this Court should be set aside and the matter referred to the agreed-upon arbitrator, Mr. Loigman argued.

While this motion was still pending, Mr. Nager learned that Mr. Goldstein was arranging a Shavuos program for Ohr Naava. He called them and told them not to do business with Mr. Goldstein.

Essentially, Mr. Nager was attempting to act on the default judgement that he received.

Immediately, Mr. Loigman asked Mr. Bender to withhold execution on the default judgment, pending disposition of his motion to vacate.

Mr. Bender counter offered that he would not execute any Writs of Seizure pending the outcome of the motion, on 2 conditions: first, that his
clients agreed not to transfer assets outside the ordinary course of business while the judgment is in effect; and second, in order to gauge compliance, that they provided meaningful answers to an information subpoena within a week.

Mr. Loigman responded only that his clients would are not to transfer assets while the motion was pending (i.e., not while the judgment is in effect). He refused to consent to answer an information subpoena.

After the parties would not agree to to the terms of any consent order, Mr. Loigman filed an Order To Show Cause, seeking immediate temporary restraints against Mr. Nager.

"The interests of my clients will be gravely harmed if their assets are levied upon to satisfy Plaintiff’s doubtful claim. They will be unable to conduct their business and personal affairs, which require the ready availability of funds. As with any business or
household, Defendants need to have the ability to write checks to pay routine bills and engage in other commercial transactions. More specifically, Defendants Hersch Goldstein and Aryeh Tours operate and manage various weekend and summer vacations, retreats, and similar programs. If Plaintiff were to execute on their assets, including bank accounts, they would immediately be unable to continue in business.


"I believe that Defendants are entitled to the protection of temporary restraints until the motion is heard to prevent the likelihood of imminent and irreparable harm," wrote Mr. Loigman.

Ocean County Superior Court Judge Craig Wellerson granted immediate restraints and scheduled a hearing on the Order To Show Cause for the following week.

Mr. Bender responded with Opposition to the Order To Show Cause, and a motion of his own to enjoin the Defendants from transferring assets other than in the ordinary course of business while the default judgment is entered against them.

"I haven’t even ordered a writ or sent post-judgment discovery. Counsel knows that even if I had a writ, identified specific assets and had the Sheriff serve it immediately, I couldn’t possibly get a Turnover Order before the Court hears the motion to vacate.
All of which begs an incredibly obvious question – what’s really happening here?
What is this unbelievable urgency, with a motion to vacate pending in 2 weeks, that Defendants and counsel don’t want the rest of us to know about?
We believe the answer appears in their own application. Defendants state that they operate vacations, retreats and similar programs, which are specifically marketed to the Orthodox Jewish community. The festival of Shavuos begins this year on May 16, 2 days after the motion, and they’re running a holiday program.
One can assume that between now and May 14, money is coming in that they don’t want us to seize. They’re not worried that the Court will release it to them in 2 weeks; they’re worried the Court won’t release it, and they want lead time before or after the motion in case they need to move it.
In all likelihood, their strategy’s already paid off. The temporary restraints have significantly closed our small window to find assets, get a writ and have the Sheriff seize them before the motion. Before, we were willing to refrain in exchange for certain assurances and information. Now, we respectfully ask the Court to enjoin them from transferring assets outside the ordinary course of business," wrote Mr. Bender.

Mr. Loigman responded, "Plaintiff identifies no hardship or harm which it would suffer if the parties were to remain in the same position that they were in prior to the default being entered. On the other hand, freezing Defendants’ bank accounts would disrupt their personal and business affairs, perhaps also causing harm to third parties (such as the guests who have made reservations for vacation or other programs)."

Mr. Goldstein signed a Certification saying that seizing his assets now while this entire matter should have been brought to arbitration, is simply unfair.

On April 30, 2021, Judge Wellerson granted an Order that while the Motion is pending, Plaintiff shall not take any action to enforce or execute on the judgment herein, such as applying for a Writ of Execution or serving an Information Subpoena; provided, however, that Plaintiff may conduct an asset or bank search; and that the parties should engage in non-binding mediation before Rabbi Chaim Meir Roth or before such other mediator they find mutually agreeable within the coming month.

Subsequently, on May 20, 2021, Mr. Bender filed Opposition to the motion to compel arbitration, arguing that the arbitration provision is not enforceable pursuant to a 2014 New Jersey Supreme Court case decision known as Atalese v. Legal Services Group, which found that arbitration provisions must include explicit waiver language which states clearly and unambiguously that in choosing arbitration, consumers are giving up their right to seek relief in a judicial forum. In this instance, the program contract simply stated that any disputes will go to Bais Din, but there was no "explicit waiver" language.

"Mr. Neger is not an attorney. He is unfamiliar with the New Jersey Arbitration Act, its provisions or the case law applying it. He agreed to Mr. Goldstein’s request to use Rabbi Roth as an intermediary. He did not intend to waive his right to sue. He did not understand and accept the final, absolute and potentially-capricious decision of any arbiter where his substantive rights (liability and damages) are not even in question. Even if Mr. Goldstein understood the arbitration process, there was no meeting of the minds necessary to form a valid contract. In any event, because the agreement lacks a clear and unambiguous waiver, it’s therefore unenforceable.

"Finally, the only parties to the arbitration agreement are Plaintiff and Hersch Goldstein. Assuming it provided a meritorious defense for Mr. Goldstein, and the Court vacated the judgment against him, it provides no basis for vacating the judgment against Joel Goldstein and Aryeh Tours," Mr. Bender wrote.

Mr. Loigman did not shoot back with any case law supporting the Arbitration Agreement, but responded simply, "Plaintiff’s anguished claim that he is “not an attorney . . . unfamiliar with the New Jersey Arbitration Act . . . did not understand and accept the limited circumstances under which an
arbitration award may be challenged" rings hollow. He knew, from the text of the arbitration agreement, that he was meeting with Rabbi Roth “to settle all our legal claims and matters between us, including all the claims and all the counterclaims of the parties,” and that Rabbi Roth’s determination would be final and unappealable."

On July 7, 2021, while the motion was still pending, the parties entered into a Settlement Agreement wherein Defendants acknowledge their respective obligations to Plaintiff as set forth in the Complaint; and "in order to avoid further expense and protracted litigation to the extent practicable, the Parties have agreed to enter into this Stipulation" wherein, in full settlement of this action, Defendants shall pay Plaintiff the sum of $180,000. The payments were to be made monthly over several years.

The Settlement Agreement included a clause that the Defendants had applied to the U.S. Small Business Administration for an Economic Injury Disaster Loan (the “SBA Loan”), and if the SBA Loan is approved, Defendants shall apply all proceeds first towards satisfaction of this loan.

Apparently, in all this time, much of the loan remains outstanding.

Recently, the Plaintiff filed for a Writ of Seizure which directs the Ocean County Sheriff to "satisfy the Judgment out of the personal property of the debtors; and if sufficient personal property cannot be found then, out of the real property belonging to the debtors."

Judge Robert Lougy granted the Order requesting this Writ of Seizure. On July 28, Sheriff Mastronardy notified Mr. Goldstein that his assets would be seized on Friday, August 4.

Immediately, Mr. Goldstein, now acting pro-se, filed an emergent motion asking the Court to stay the Writ of Seizure.

Mr. Goldstein wrote that instead of Mr. Loigman arguing on the merits of his motion to compel the matter to arbitration, Mr. Loigman "urged him, for reasons unknown to him," into signing the Settlement Agreement, which requires him to pay the settlement amount; he feels that the Arbitration Agreement can and should still be upheld and the matter should be compelled back to arbitration.

"It is well settled that vacatur of settlements are appropriate in the face of attorney neglect. Guido v. Duane Morris...

"So many avenues of defense were available to me, but were overlooked by my then-counsel who, instead, simply capitulated and urged me to sign the Settlement Agreement.

"In only a couple of days, the Sheriff is about to execute his Levy against my meager assets. I therefore implore this Court to vacate the Judgement and Writ, and to Stay the Sheriff's Levy," wrote Mr. Goldstein.

Judge Wellerson was not persuaded.

Immediately, without even scheduling a hearing on the request, Judge Wellerson denied the motion, writing, "parties entered into a stipulation of settlement under the advice of counsel. No irreparable harm. No likelihood of success on the merits."

In yet a separate legal matter, Mr. Goldstein recently attempted to file for bankruptcy, which would have permitted him to save certain assets from seizure. U.S. Bankruptcy Court Judge Michael Kaplan blocked this move for a period of two years.

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