Dzeko Scammers File Appeal
Yesterday in At 10 Wickman Road, Roy Dzeko’s Men Don’t Get Away With Scamming Ravi Banwait Out of $1.3 Million we told you the story about how experienced billboard men tried to steal a billboard lease at 10 Wickman Road.
We called the men the Dzeko Consortium, and named it after Roy Dzeko, the CBS Outdoor leasing man. The Consortium is putatively led by a man named Elio Monaco, whose name appears on corporate records searches as a director of the numbered company which Banwait is suing. Roy Dzeko was Elio Monaco’s best man at his wedding.
Before Roy Dzeko worked for CBS Outdoor, he worked for Astral Media. Curiously, rather than making a deal with CBS Outdoor for the sign at 10 Wickman, Elio Monaco entered into a lease with Astral Media. Of course, it’s not his sign to lease, it’s Banwait’s.
The Dzeko Consortium lost their case in court and have now filed an appeal. In the meantime, the Consortium has offered Banwait a settlement for breach of contract. They are offering about 10% of the fair value of the sign. Banwait is smartly demanding performance of his lease.
Here’s the problem that the Consortium faces. They paid $1.3 Million dollars for a property that is worth about $800,000 with no billboard and $2.6 Million with a billboard unencumbered by a lease. The lease is very favorable to Banwait and allows him to pay the landowner only $24/year plus 25% of gross revenues. Since Banwait’s company, Xmedia, intends on selling the space on the sign itself in order to give his company presence in the industry (rather than flipping the lease to an established billboard firm) 25% of the gross revenues from the sign is hardly enough to compensate the Consortium for the premium they paid for the property, given that they have no control over the way the billboard will be operated.
In other words, the structure of the lease, as a % of revenue, puts all the cards in Banwait’s hands and gives the scammers no leverage. In fact, if Banwait was to flip the lease to an established billboard firm (step right up Pattison Outdoor) he would be advised to re-negotiate the lease, giving the Dzeko scammers a less than 25% cut, since the scammers lose money if Banwait doesn’t flip the lease.
In the meantime the Dzeko men appear to be mistakenly banking on the notion that Banwait doesn’t understand the true value of his sign and can’t afford to maintain the legal battle any further. In truth, time is very much on Banwait’s side here. See, Banwait understands that the structure of his lease gives him all the time in the world in which to flip the lease – he could do it now, or he could do it 5 years from now and bleed the scammers, who only bought the property to quickly flip it.
Here are their appeal documents [PDF]:
