Multibillion-dollar development empire, built by Auschwitz survivor, has been ordered sold because his four wealthy sons can’t get along

A multibillion-dollar development empire, built from nothing in the Toronto suburbs by a man who survived Auschwitz, has been ordered wound up and sold because the founder's four wealthy sons can't get along.

The late Teddy Libfeld lived through the Holocaust in his native Poland before emigrating to Canada in 1951. He founded the company that became the Conservatory Group in 1960 and ran it, beginning in the late 1970s with his children, until his death, in 2000.

The Conservatory Group, now valued at between $2.5 billion and $4 billion, is one of a handful of the most important developers in the postwar history of Greater Toronto. Libfeld's housing developments and condo projects helped define the shape and feel of suburban, and, to lesser degree, urban living in the Toronto area for decades.

But now all of that is to be liquidated, in a court-supervised sale, thanks to a poisonous feud between the Libfeld heirs: Sheldon, Mark, Corey and Jay.

In a long and openly exasperated ruling released June 30, Ontario Superior Court Justice Thomas McEwen detailed a family dynamic dysfunctional beyond repair.

While it is not surprising that brothers working closely together over several years will become embroiled in some disputes, what is surprising is the extent to which the Libfeld brothers have allowed their disagreements to fester and grow," McEwen wrote.

The disputes and altercations have expanded to involve unwilling staff and business partners, as well as their mother. The disputes have also taken a terrible toll on their personal relationships with each other."

The only answer to the rancour, McEwen ruled, is to wind the company up and sell it, parcelling off Teddy Libfeld's legacy to the highest bidder or bidders.

This is the only reasonable option given the extreme dysfunction that exists, both personally and professionally, between the Libfeld brothers," he wrote. (T) his extreme dysfunction has evolved significantly over time and includes allegations of dishonesty, in addition to verbal and physical abuse ....

There is a complete lack of trust and mutual respect between the two warring factions."

McEwen took pains to detail why he didn't fully trust what any of the four brothers said on the stand. (He titled one full section of his 226-page ruling THE LIBFELD BROTHERS ARE NOT CREDIBLE OR RELIABLE WITNESSES.")

But the roots of the feud seem relatively clear.

After Teddy Libfeld's death, ownership of the Conservatory Group was split between the four brothers and Libfeld's widow, Lorraine Libfeld. But the Conservatory Group is not a single company; it is, instead, a collection of more than 350 single-purpose entities and joint-venture interests.

When their father was alive, the Libfeld boys largely stuck to their own areas of expertise within the empire, according to the ruling.

But after his death, they failed to formalize any kind of deal about the future governance of the company.

In fact, no written agreements exist with respect to any important aspect of their ownership or operation of the Group," McEwen wrote, whether it be related to finances, insurance, cash distributions, or succession planning."

Over time, that uncertainty contributed to a series of disputes between the brothers over money, investments, control and other issues. By 2015, things had become so bad, the brothers were openly fighting in front of employees, business partners and each other, according to McEwen.

In one alleged incident laid out in the ruling, Sheldon and Corey, two grown multimillionaires, got in a physical fight in Sheldon's office, with each blaming the other for its inception," McEwen wrote.

Corey alleges that Sheldon charged him with considerable force and ripped his jacket and shirt in the ensuing melee. Corey alleges that he suffered injury, specifically bone loss' to his leg (though no medical evidence was adduced at trial)."

In another incident, during the COVID-19 pandemic, Mark wore his protective mask upside down to a meeting. Sheldon raised this in front of the Group," McEwen wrote. Mark claims that Sheldon teased him' in front of everyone in a mocking manner. Sheldon denies this."

Later in that same meeting, Corey and Mark allege that Sheldon became very angry, confronted Corey and egged on Corey to strike him. Sheldon and Jay disagree. Corey began name-calling. He called Sheldon, and perhaps Jay (the evidence is unclear on this point), Hitler' as well as accusing Jay of being a liar and a snake,' " wrote McEwen.

In his testimony at the trial, which McEwen dismissed as largely unreliable, Corey, who like his brothers received about $125 million dollars from the company between 2004 and 2020, compared working with Sheldon and Jay to living in a concentration camp.

It is astonishing that Corey would compare his privileged life (in which large credit goes to his parents) to his father's horrifying experience during the Holocaust," McEwen wrote.

In a statement to the Star, a lawyer for Mark Libfeld wrote that Mark Libfeld is an experienced and successful business leader who is well respected within the real estate industry and in the community. Mark and his brothers, the co-owners of The Conservatory Group, were unable to come to a resolution regarding the future of the organization. The court has determined the best way forward is to separate the brothers' interests."

Jay Libfeld's lawyer said it would be inappropriate for him to comment at this time. Lawyers for the other two brothers could not be reached before deadline Thursday.

The fight laid out in McEwen's ruling is a far cry from the picture Sheldon Libfeld painted in an article about the company published in the Toronto Star in 2012.

Sheldon Libfeld knows his dad, who launched the Conservatory Group in 1960 and ran it with his four sons until he died in 2000, would be pleased with how the family business is being managed," that story said.

He'd enjoy what's going on with the company and how we're doing things," Sheldon Libfeld said. We're living his vision - we've stayed together in the business and grown it.

That story's first line: If Teddy could see them now ...."

Richard Warnica is a Toronto-based business feature writer for the Star. Reach him via email: rwarnica@thestar.ca