American Dream sues tenant it says is behind more than $100K on rent and fees
The American Dream megamall’s developers say in a suit that one of its tenants — shoe consignment store Sole Demand — is behind on more than $111,418 in rent and other fees and tried to defraud the mall.
Sole Demand opened for businesses at American Dream on March 4 this year and hasn’t paid any rent since then, says the three-count brief filed on Dec. 26.
The Sole Demand company first went into operation on Jan. 13, 2021, and sells “a wide variety of high-demand brands such as Air Jordan, YEEZY,” to consumers, according to court documents.
Sole Demand’s dispute with American Dream is the latest in a long line of legal battles and fraud cases against it, including filings by another mall and members of the public.
The suit says Michael Giblin, Sole Demand's owner, opened the store to defraud the American Dream mall and its developers, Ameream.
“[A]bsent piercing the corporate veil, Michael Giblin’s entity form will have been used to perpetrate a fraud against Plaintiff, and to allow its members to evade the law,” the suit reads.
According to Cornell University’s Legal Information Institute, “piercing the corporate veil” refers to when the financial protection of a limited liability is put aside and a corporation’s shareholders and directors can be held personally responsible for the actions and debts of that company.
The suit does not speak to what kinds of state, federal or local laws Giblin or the store may have tried to evade, and a spokesperson for the mall declined to comment.
Eviction proceedings
The lawsuit says the money owed includes $76,681 in minimum rent, $23,879 in percentage rent, $5,118 in late charges, $3,940 in late interest, $240 in pest control fees and $1,560 in IT charges.
American Dream’s developers, Ameream, are seeking a judgment against Giblin and the store to collect the money.
On May 25, Ameream defaulted the tenant and instituted eviction proceedings, says the suit, formally evicting the business in September.
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“Michael Giblin, nonetheless, attempted to sell the landlord’s fixtures and shelving to a third party without landlord’s knowledge and without advising the prospective purchaser that the property in question was the landlord’s and not Mr. Giblin’s,” the suit reads. “This further demonstrated Mr. Giblin’s bad faith, fraudulent conduct, and deceitful practices in violation of the lease.”
Giblin could not be reached by phone for comment.
Extensive legal history
Sole Demand has faced legal trouble in the past. As part of an ongoing case, it is allegedly in default on $23,600 in rent and other payments from 2021 through 2023 at Livingston Mall in Essex County. The owners are seeking that money, as well as other legal payments.
A court ruled against Giblin and Sole Demand on Dec. 8 in another case in which two plaintiffs — Changpeng Cheng and Yuting Qiao — entrusted Sole Demand and Giblin with “tens of thousands of dollars” in “authentic and rare sneakers over the course of months.”
But Giblin allegedly made off with the shoes and sale proceeds, giving both plaintiffs the runaround as they tried to get payout on their shoes and the unsold shoes back, the suit alleges.
All told, Cheng and Qiao were owed at least $86,645 because of the unreturned shoes, which didn’t include legal fees and other damages.
The pair went to visit the American Dream store on Oct. 5 and found it closed, with Giblin having sold the store for “big money,” the suit reads. He started selling the shoes via other brick-and-mortar stores and online channels, such as Shopify and eBay, court documents say.
Ultimately, the court ruled that Giblin was in possession of the vast inventory of Cheng and Qiao’s shoes and had to turn over any sale proceeds.
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.
Email: munozd@northjersey.com; Twitter:@danielmunoz100
This article originally appeared on NorthJersey.com: American Dream sues tenant it says is behind on rent and fees
