A lawsuit filed by a major Chicago real estate brokerage alleges that an executive raided confidential and proprietary information and recruited away employees before he left to lead a rival company.
Koenig & Strey GMAC Real Estate and GMAC Home Services LLC filed the lawsuit against its former executive vice president and general manager who now serves as president and chairman of the board for Prudential Preferred Properties in Chicago. The lawsuit also names Midwest Realty Ventures LLC, which is doing business as Prudential Preferred Properties, and two other former Koenig & Strey GMAC Real Estate officials who now work at the rival Prudential company.
Two other lawsuits have been filed against Midwest Realty Ventures by Chicago-area brokerage companies, the Chicago Tribune reported. These lawsuits have alleged that former officials at Habitat Company Brokerage and Baird & Warner Residential Sales broke their employment contracts in leaving to work for Prudential.
Habitat Company Brokerage’s lawsuit was reportedly dismissed.
The Koenig & Strey complaint charges that Pierson “used his position of great trust and influence to solicit others high up in the organization who reported to him to leave the company and to brazenly misappropriate significant amounts of confidential and proprietary information across a broad spectrum of (Koenig & Strey’s) business.”
Also, the lawsuit charges that the former company officials continue to solicit Koenig & Strey’s agents and employees and continue to use the company’s confidential data and to interfere with the company’s business.
In a statement, a Prudential Preferred spokeswoman said today, “While we cannot discuss the details of this legal action, we can assure you that we hold our company’s reputation and the reputation of all our employees in the highest regard. Integrity is one of our core values and we are confident that the legal process will prove this to be true.”
Representatives for Koenig & Strey were not immediately available for comment today about the lawsuit.
Koenig & Strey is one of the largest Chicago-area real estate companies, with about 1,100 real estate agents, 200 employees and 17 offices.
According to a bio at the Prudential Preferred Web site, Pierson earlier served as owner for Seery & Keim Realtors, a company that was acquired in 2000 by Koenig & Strey. He then served as an executive for that company, managing operations and growth for the company’s offices before leaving in January.
Prudential Preferred CEO Chris Eigel is also a former Koenig & Strey executive — Eigel served as president of Koenig & Strey until his departure in December 2006.
On Feb. 26, Prudential Preferred Properties announced that Eigel and Pierson “have acquired nine of 11 Prudential Preferred Properties’ Chicago-area offices” and “have made it their primary objective to expand Prudential Preferred and its brand in the Chicago area.” The pair acquired the company’s Libertyville, Highland Park, Winnetka, Northbrook, Evanston, Lincoln Square, Lakeview and Gold Coast branch offices, and the company’s Edgebrook corporate facility.
Pierson had earlier served as the general manager for Koenig & Strey’s Gold Coast office.
The Koenig & Strey lawsuit seeks a restraining order and preliminary injunction to prevent the former company officials and Prudential Preferred Properties from retaining or using any of Koenig & Strey’s confidential, property or trade secret information, from including information about Koenig & Strey’s listed properties without disclosing Koenig & Strey as the listing broker, and from soliciting Koenig & Strey’s agents and employees.
