No, we’re not talking about that David J. Stern, the lawyer turned NBA commissioner. We’re talking about David J. Stern of Plantation, Florida, a leading lawyer to banks and financial services companies in mortgage-related and foreclosure proceedings.
Over the holiday weekend, the New York Times ran a lengthy article, by Gretchen Morgenson and Geraldine Fabrikant, focused on Florida’s new foreclosures-only courts. Florida’s court system has been so overwhelmed by foreclosure proceedings that the state earlier this year set aside $9.6 million to establish foreclosures-focused courts around the state, presided over by retired judges.
One of the major players in the new court system is David J. Stern, whom the Times describes as “[t]he lawyer most closely identified with Florida’s foreclosure morass.” And for his troubles, this “mystery man within the foreclosure world” has been richly rewarded — very richly rewarded.
Stern went to a fourth-tier law school, but financially he’s running circles around all those Stanford and NYU law grads who wound up as Biglaw partners. His inspiring story shows that, in the end, success in the law is not about where you went to school, but what you’re capable of doing.
Even if you graduated from a non-top-tier law school, if you’re aggressive and smart and entrepreneurial, you can do quite well for yourself. Let’s take a look at David Stern….
Like many a Morgenson article, the NYT piece about the Florida foreclosure courts may engender reactions of TL; DR. And, to be sure, it is long, and it very much fits the Morgenson mold (railing against perceived injustices in the world of business and finance — yawn). But buried deep within the article’s 3,000 plus words is some juicy dish about the powerful and mysterious Mr. Stern:
Operating out of a gleaming eight-story office building in Plantation, Fla., Mr. Stern, 50, has come a long way from the South Texas College of Law, from which he graduated in 1986. He spent his early career as a quality-control lawyer for Gerald Shapiro, a lawyer who represented mortgage lenders. He opened his own firm in 1994; Fannie Mae voted him attorney of the year in 1998.
Mr. Stern’s company, which now includes a law firm and ancillary foreclosure support businesses, employs more than 900 people. The firm filed 70,382 foreclosure cases last year.
Stern’s alma mater, South Texas Law, is a fourth-tier law school, according to the U.S. News rankings. Some say that you shouldn’t go to law school unless you can get into a first-tier institution. But if David Stern had followed that advice, he probably wouldn’t be where he is today.
And where is that, you ask? In the lap of luxury, earning many times more than those lame Harvard and Columbia law grads who are partners at large law firms:
Brian Foley, a compensation consultant in White Plains, concluded that Mr. Stern made $17.8 million in 2008, including $12.64 million in compensation and nonrecurring benefits of $4.36 million. In the deal with Chardan [in which he sold off a support-service part of his operation], Mr. Stern and his affiliates were paid $93.5 million: $58.5 million in cash and $35 million after the transaction closed, according to government filings. In addition, Mr. Stern got a promissory note for $52.49 million to be paid out over the next couple of years.
And David J. Stern, in true south Florida fashion, knows how to spend all those benjamins. Interested in Lawyerly Lairs? Stern has several:
In recent years, Mr. Stern and his wife, Jeanine, have bought nearly $60 million in real estate, mostly in Florida, property records show. Their Mediterranean-style home on Harborage Isle Drive, in a gated community in Fort Lauderdale, faces water on two sides and cost almost $14 million. Not far away, in Hillsboro Beach, the Sterns bought two waterfront properties for $17 million.
Mr. Stern also spent $6.8 million last year on a 9,273-square-foot apartment at the Castillo Grand Residences in Fort Lauderdale, part of a Ritz-Carlton complex. He and his wife own two homes in Beaver Creek, Colo.; one was purchased in 2001 for $4.975 million, and another bought in 2007 for $14.2 million.
He also has incredible cars, including “a 2008 Bugatti, multiple Ferraris, Porsches and Mercedes and a Cadillac.” His automobile collection may be worth as much as $3 million.
Being a foreclosure lawyer, Stern knows that people can lose their homes. No worries — in the unlikely event that he were to lose his (many) luxury homes, he can just repair to one of his boats:
Mr. Stern also collects boats. A 108-foot Mangusta yacht, Lady J, is for sale at $5.9 million, Web postings show. It was replaced by a 130-foot yacht that cost about $20 million, according to an acquaintance who requested anonymity over concerns about Mr. Stern’s influence in the community.
In a nod to his foreclosure work, according to the acquaintance, Mr. Stern mused about possibly naming the larger yacht Su Casa Es Mi Casa — “Your House Is My House.” But his wife and others cautioned against it, according to this acquaintance, and Mr. Stern named the boat “Misunderstood.” Mr. Stern denies that he considered the “Su Casa Es Mi Casa” name.
That’s too bad. We’d respect Stern more if he had had the guts to go with that delightfully obnoxious moniker.
There is also some stuff in the NYT article questioning the ethics of David J. Stern and his colleagues, identifying possible conflicts of interest, and discussing an investigation by Florida’s attorney general. But when a man is making this kind of bank, some player-hating is to be expected.
Anyhoo, if you care about all that ethics mumbo-jumbo, you can read the full article at the link below.
Florida’s High-Speed Answer to a Foreclosure Mess [New York Times]