The Supreme Court of Ohio today rejected a real estate developer’s request to block a magistrate's order aimed at collecting a $1.5 million judgment. The case concerns an effort to redevelop a downtown Cincinnati property.
In a unanimous per curiam opinion, the Supreme Court denied a writ of prohibition requested by Ronald Goldschmidt, who claimed a Hamilton County Common Pleas Court magistrate exceeded his authority when ordering a probe into the finances of four businesses connected to Goldschmidt. The Court affirmed a decision by the First District Court of Appeals, which also denied Goldschmidt’s request for a writ.
Both the Supreme Court and the First District ruled that Goldschmidt must first have Hamilton County Common Pleas Judge Alan Triggs rule on the matter before pursuing any further appeals.
The dispute is associated with a 2016 civil lawsuit against Goldschmidt related to his attempts to redevelop the former Convention Place Mall, located at 435 Elm Street in Cincinnati. The city leased the property to Goldschmidt’s companies for development, and the effort was financed with a mortgage loan from U.S. Bank. Goldschmidt agreed to be personally liable for any debt payments to U.S. Bank.
In 2016, U.S. Bank sought to foreclose on the mortgage and pursued a judgment against Goldschmidt. As the case proceeded, the bank transferred all its rights in the loan to 435 Elm Investment LLC. Elm Investment then continued to pursue Goldschmidt to repay the loan. The court found Goldschmidt owed Elm Investment more than $1.5 million.
Elm Investment sought to collect the unpaid judgment through a “charging order.” Under R.C. 1706.342, a court can issue a charging order that allows funds to be collected from limited liability company owners, who are called members. The trial court issued the charging order, permitting Elm Investment to seek repayment from six companies that Elm Investment believed were associated with Goldschmidt.
Goldschmidt appealed the charging order to the First District, which reversed the trial court’s decision. The appeals court found that some of the companies were not limited liability companies and that Elm Investment did not provide evidence to prove that Goldschmidt was a member of any of the LLCs ordered to pay the judgment. The First District remanded the case to the trial court for further proceedings.
In September 2023, Elm Investment asked the trial court for another charging order to collect funds that would go to Goldschmidt through his membership rights in four LLCs. A magistrate conducted a hearing on this matter and granted an “order” for another charging order, finding that Elm Investment had rights over distributions obligated by these four LLCs towards Goldschmidt.
Due uncertainty about how much money was held in trust for Goldschmidt and his companies or what percentage ownership he had in these entities, additional requirements were added by magistrate: an accounting presentation of funds held in trust along with documentation verifying his membership interests within those firms.
Goldschmidt petitioned both magistrate & Judge Triggs' courts seeking stays on such orders while challenging their validity via legal processes but faced rejection; henceforth appealing towards higher judiciary levels requesting writ prohibition citing overreach issues arguing judicial approval necessity under R.C 1706 .342 clause limitations regarding asset accountings without prior judge consent approvals required therein dismissed initially eventually reaching state supreme jurisdiction analysis evaluations resulting current verdict denials confirming procedural adequacies lower tier appellate recourses accessible remain viable option routes thus invalidating prohibitory writ justifications per established law principles outlined respective opinions detailed herein referenced accordingly concluded affirmatively