Real estate heavyweight Gary Barnett is spending plenty of time in Brooklyn court these days, locked in a bruising, multi-year fight with two former business partners over more than $15 million in unpaid electrical-contracting fees and disputed ownership stakes. The clash has spilled into a separate claim tied to six Rockland County properties and prompted a judge to freeze roughly $5.3 million while those ownership issues get sorted out. Barnett is still pushing back in court even as his firm, Extell Development, keeps rolling out new projects across New York City.
How the dispute started
The legal battle kicked off in 2022, when plaintiffs Yoel Weber and Yoel Leonorovitz sued Barnett, HP Stock LLC (an entity Barnett controls) and Extell for about $15 million, according to a March 18 court order. Barnett has fired back with a counterclaim that he, through HP Stock, holds a 33.3 percent stake in Horsepower Electric and is owed a share of roughly $21 million from sales of six Rockland County properties. Those competing claims are detailed in the March 18 order posted at Justia.
Frozen funds and the Pascack sale
In December 2023, Justice Leon Ruchelsman ordered that exactly $5,266,896.14 be set aside and not disbursed until Barnett's ownership interest in the Pascack entities is resolved. The court arrived at that number after combing through closing statements from the Rockland County sales, which showed roughly $15.8 million remained available to be secured, as recorded by the New York courts.
Discovery fight and denied motions
Discovery has turned into its own mini war. The plaintiffs told the court they produced about 87,000 documents and roughly 320,000 pages, while the defendants insisted those productions were incomplete. On March 18, Justice Cenceria P. Edwards denied Barnett’s motions to strike the plaintiffs’ pleadings, writing that “Failure to provide an affirmation of good faith ... warrants denial of the motion,” and finding that the defendants had not shown the kind of willful misconduct that would justify striking a pleading. Those conclusions appear in the March 18 order available at Justia.
Barnett appeals and what's next
Barnett filed an appeal on April 28, 2026, sending the dispute up to an appellate court and keeping the fight alive beyond the trial court’s discovery rulings. That move, along with other recent filings, was reported by The Real Deal, which also noted that attorneys for the parties did not respond to requests for comment.
Legal implications
Under New York practice, courts can hand down drastic CPLR 3126 sanctions, such as striking a pleading or precluding evidence, only after a clear showing of willful and contumacious discovery misconduct. On top of that, motions tied to disclosure must include an affirmation that counsel conferred in good faith, as required by 22 NYCRR 202.7. Those procedural hurdles, cited in the March 18 decision, suggest the case is likely to keep revolving around discovery disputes and appeals before there is any final trial on the underlying money claims, according to the New York court rules.
Where this leaves Barnett
The appeal and the frozen funds could keep the litigation grinding on for months, even as Barnett’s Extell continues acquisitions and development work in Manhattan. Recent coverage of Barnett’s Midtown buying streak has set the backdrop for the dispute, showing a developer who remains very much in the game. That includes a high-profile Park Avenue assemblage, detailed in Hoodline’s report on Extell's $500M Park Avenue play.
