A battle has erupted between Nancy Salzman and attorney Neil Glazer, representing 70 plaintiffs in the NXIVM case (Edmondson et al. v. Raniere et al.) over $116,000.
On January 28, 2020, the NXIVM plaintiffs sued Salzman, Keith Raniere, Clare Bronfman, Sara Bronfman, and others for their alleged abuse of them as members of NXIVM.
In September 2022, Salzman agreed to settle with the plaintiffs by providing information and documents to help them win their lawsuit against the others, and selling three properties, and turning over the net proceeds to the plaintiffs.
At the time of the settlement, Salzman was in federal prison, serving a 41-month sentence for racketeering conspiracy as part of the NXIVM criminal case.
Salzman sold the properties for $600,000.
The properties and their sales prices were:
– 3 Hale: $230,000 (where Lauren Salzman lived before she bought her own home)
– 9 Hale: $190,000 (Next to Keith Raniere’s library, once occupied at various times by Michelle Salzman, Loreta Garza, and Sylvie Lloyd)
– 203 Yorktown Drive: $180,000 (Occupied by Dawn Morrison)
Salzman is Free
Salzman is out of prison. She completed her stay in a halfway house and returned to suburban Albany, where she had assisted Keith Raniere for 20 years in leading a community called NXIVM. She is on probation.
MK10ART’s painting of Nancy Salzman
MK10 Art’s painting of the two NXIVM leaders, Raniere and Salzman.
What Is Net Proceeds?
The $116,000 dispute is over what “net proceeds” means. Salzman claims net proceeds include the amount left over after subtracting the federal capital gains taxes and instructed her closing agents to withhold that sum from the plaintiffs.
Glazer argues the settlement agreement, which defines “net proceeds,” does not include capital gains.
Neil Glazer
Glazer filed a letter asking Judge Eric Komitee to compel Salzman to pay the $116,000 she is withholding for capital gains tax.
Glazer wrote, “The Settlement Agreement with Ms. Salzman had the effect of simplifying this case. But Ms. Salzman is now refusing to comply with its terms. The core of the bargain struck in the Settlement Agreement was that Plaintiffs would not pursue civil remedies against Ms. Salzman for her role in NXIVM if (i) she cooperated with Plaintiffs in providing information and testimony relevant to their claims against other Defendants in this action, see id. § C; and (ii) she conveyed the proceeds of the sales of three properties to Plaintiffs, see id. § B. Ms. Salzman has paid Plaintiffs some of the proceeds from the three property sales. But her payments are incomplete, and she is refusing to comply with the terms of the Settlement Agreement.
“Specifically, the Settlement Agreement requires Ms. Salzman to transmit to Plaintiffs’ counsel the ‘net proceeds’ of the property sales. Id. § B(8).
“‘Net proceeds’ is defined in the Settlement Agreement as ‘the sale price paid by the purchaser’ minus … ‘real estate agent commissions, closing costs, real estate transfer taxes and reimbursement … of security deposits.’…
“Notwithstanding that clear-cut definition of ‘net proceeds,’ Ms. Salzman has informed Plaintiffs’ counsel that she has directed the settlement clerk to withhold $116,189.19 of the proceeds of the sale of the third property to cover capital gains taxes for each of the three properties. Capital gains tax, however, is not one of the categories of costs that may be subtracted from the purchase price under the Settlement Agreement’s definition of ‘net proceeds.'”
The Settlement Agreement states that in case of a breach, the Plaintiffs may seek an order forcing Salzman to comply with it and/or revive their lawsuit against her.
Who Gets What?
Salzman’s attorneys argue that, while the signed agreement does not mention subtracting money for capital gains from the sales, forcing Salzman to pay the capital gains would “be unfair and a breach of the spirit of the agreement.”
The net proceeds without the subtraction of $116,000 would be approximately $525,000. If the lawyers took one-third or $175,000, the attorneys would disburse the remaining $350,000 to the 70 plaintiffs. If each of the plaintiffs shared equally, each would receive $5,000. However, not all plaintiffs have equal claims of damages, and not all have specific claims against Salzman.
It is unknown how the attorneys will handle the distribution of the Salzman proceeds.
It is also unknown how the judge will rule on the $116,000 dispute, but it may be decided shortly.
