Seven years after Kerstin Bachmann rebranded Pernelle Real Estate and launched 56Paris with funds, clients, and intellectual property generated by Paris Property Group founder Miranda Junowicz-Bothe and her company, a federal appeals court in Paris ordered 56Paris to return the ill-gotten funds and assessed punitive damages for its “brutal” breach of contract. In the course of the litigation, Ms. Bachmann and 56Paris countersued Ms. Junowicz-Bothe, and brought claims against longtime Paris Property Group team members Kathryn Brown and Jerome Cacarié. In the lower court and again on appeal, all of Ms. Bachmann and 56Paris’ claims were found baseless and thrown out.
The hundreds of pages of pleadings and over 200 exhibits included multiple declarations by business partners who made clear that it was their trust and confidence in Ms. Junowicz-Bothe that led them to refer clients to the Bothe-Bachmann collaboration over the years. In fact, one spreadsheet created by Ms. Bachmann herself showed that, over the span of 3 years, of the 74 clients signed by Pernelle, 85% of them came from Ms. Junowicz-Bothe; only 5 clients were brought in by Ms. Bachmann. She argued that Ms Junowicz-Bothe contributed nothing to the partnership, thus justifying her brutal breach of contract. The court disagreed.
In 2019, weeks after the punishing verdict in the lower court, 56Paris filed for bankruptcy protection. “It was no surprise to learn that Ms. Bachmann put 56Paris under bankruptcy protection in order to avoid paying her debt to me,” said Ms. Junowicz-Bothe following the successful appeals verdict. “Unfortunately her way of doing business is to ignore the contribution of others and to believe that she alone deserves the credit and the money for work well done. Kerstin had never worked a day in real estate before we met, and instead of enjoying the success we built together in Paris Property Group, she chose a dishonest and dishonorable path. She stole from me, then sued my colleagues and friends and threw whatever mud and nonsense at us to try and muddle the facts and fool the court. Happily the judges were not deceived.”
Despite a requirement under French law, 56Paris has not publicly filed its annual reports in over 5 years, 7 years into this litigation. As such they have prevented the plaintiffs from seeing the company profits, as well as Ms Bachmann’s salary and dividends. In 2019 56Paris files for bankruptcy protection – the US equivalent of Chapter 11, and is now under the direction of a trustee. Still, she continues to refuse to disclose the reports. “Kerstin Bachman already showed herself ready to interpret the numbers to suit her needs, and we want to make sure she is not doing that now with the bankruptcy protection,” said Claude Mizrahi, attorney on appeal for the Paris Property Group team. “If chapter 11 is being used as a shield, that’s fraud. My clients are owed nearly €180000, and they have a right to get paid now or see her numbers. The game is up, and it’s time to pay up, so we can all move on.” Mr. Mizrahi says he has just received the final executed verdict needed to submit to the bankruptcy trustee for payment. The winning parties also have a lien on an apartment that Ms. Bachmann purchased in Paris’ high-end 7th arrondissement – an apartment that she bought at the very moment that she breached their contract and made off with the shared profits.
“Anyway,” Ms. Junowicz-Bothe said, “the Paris Property Group brand has flourished without Ms. Bachmann and is the furthest thing from bankrupt. It’s not a surprise when moral bankruptcy catches up with you in the wallet too.”
All told the French court ordered 56 Paris and Kerstin Bachmann to pay over €178,000 in damages and attorney fees for their wrongdoing.
Read the full judgement in both French
. Note that the English translation, provided by Ms. Bachmann, translates the word “brutale” as “sudden” instead of its obvious and more descriptive translation, brutal. As such only the French text reflects the true finding of the court.