Developer sues Dickerson & Nieman partner for $7.3 million

By Nate Legue

BusinessRockford.com

Read court documents from the case
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ROCKFORD — A co-owner of the largest real estate firm in the Rock River Valley is accusing his partner of fraud and seeking to dissolve the company, according to court documents.

Developer Jeff Petry, who bought half of Dickerson & Nieman Realtors less than nine months ago, is suing partner Frank Wehrstein for more than $7.3 million, according to papers filed July 10 in Winnebago County Circuit Court.

One lawsuit accuses Wehrstein of “reckless and egregious acts or breaches of fiduciary duty and corporate waste.”

It alleges that Wehrstein didn’t tell Petry about an ongoing investigation into “questionable employment tax practices” at the real estate firm before Petry paid $2.3 million for 50 percent ownership in November 2007.

The suit seeks Petry’s money back, plus more than $5 million in punitive damages. It also names Wehrstein’s attorney in the deal, Robert Pottinger, and his Rockford law firm, Barrick Switzer Long Balsley and Van Evera, as defendants.

Wehrstein fired back in a written statement late this afternoon, calling Petry’s lawsuits “frivolous” and portraying them as little more than sour grapes over a dismal real estate market.

“As long as Mr. Petry insists on using the courts to address what he now appears to believe was a poor investment decision on his part, the company and Mr. Wehrstein will defend those lawsuits aggressively,” wrote attorney Brendan Maher.

Petry’s other suit seeks to reinstate former general manager Mike Dunn as a court-appointed receiver to run the company while the court liquidates the corporation.

Dunn was terminated by Wehrstein on June 27 after 18 years with the company, according to the suit.

Changes at the top have not been unknown at Dickerson & Nieman. The company was created a decade ago by a merger of Dickerson Realtors and Bob Nieman Realtors, making the area’s largest real estate company. In the years since then, Tom Dickerson retired, and Bob Nieman left the firm.

In 2005, the firm broke $500 million in sales, and in 2006, it broke into the top 200 largest real estate agencies in the U.S.

Because Petry and Wehrstein each own half the privately held company and are deadlocked, Illinois law provides that the courts can intervene to remedy such disputes by appointing outside managers, removing directors, forcing the sale of shares or dissolving the company, among other powers.

Petry’s attorney David Novoselsky would not comment on pending litigation.

Reach staff writer Nate Legue at 815-987-1346 or nlegue@rrstar.com.