JDSPULSE

Formal Structures Failed to Protect: Court Confirms BNP’s Right to Access JDS Financial Documents

On December 14, 2025, the results of a judicial proceeding dated December 9, 2025, from the Supreme Court of the State of New York became publicly available in the case of BNP Development LLC v. JDS Principal 9DKB LLC et al. The significance of this decision extends far beyond the mere formal confirmation of the arbitral award. The court did not simply uphold the arbitration. It systematically and publicly invalidated the key arguments advanced by JDS, thereby affirming the investor’s right to in-depth access to the financial documentation of the Brooklyn Tower project (9 DeKalb Avenue).

Judicial Context

BNP Development petitioned the court to confirm:

  • a partial final arbitral award issued in April 2025;
  • a final arbitral award issued in July 2025.

JDS, in response, sought to vacate these awards, contending that:

  • the arbitrator acted irrationally;
  • the arbitrator exceeded the scope of their authority;
  • the arbitrator violated the laws of the State of Delaware.

Judge Joel M. Cohen rejected all of these arguments without exception.

Key Judicial Finding: Arbitration Is Final

The court reaffirmed a fundamental yet critically important principle: a party’s disagreement with the interpretation of a contract does not constitute grounds for vacating an arbitral award.

The arbitrator:

  • did not impose new terms;
  • did not exceed the boundaries of the agreements;
  • provided a permissible and legally sound interpretation of the parties’ agreements.

The court explicitly stated that it is not empowered to substitute its judgment for that of the arbitrator, even if one party deems the arbitrator’s interpretation erroneous. For JDS, this represented the loss of its primary line of defense.

The Most Sensitive Issue: Documents of Affiliated Entities

The most significant aspect of the decision pertains to BNP’s access to:

  • accounting books;
  • bank records;
  • general ledgers;
  • documents related to the transaction between JDS and its affiliated entities with Silverstein Capital Partners.

JDS argued that BNP, not being a member of the affiliated companies, had no right to their documents. The court upheld the arbitrator’s position:

  • the matter concerns contractual rights of the investor, not corporate status;
  • corporate structures cannot serve as a shield if the contract permits broader access.

In effect, the court indicated that special purpose vehicles (SPVs), affiliates, and subsidiaries do not constitute safe havens if the fate of investments is determined within them.

Why the Delaware Law Argument Failed

JDS relied on §305 of the Delaware Code, asserting that BNP had not demonstrated a “proper purpose” for requesting the documents.

The court adopted the arbitrator’s reasoning:

  • BNP possesses an independent contractual right that does not depend on §305;
  • even under §305, a proper purpose has been established;
  • this purpose is directly linked to verifying the transaction that, according to BNP, effectively nullified its investment.

It is here that the dispute ceased to be a formal question of document access and approached an examination of managerial and financial decisions.

Procedural Pause — Not a Victory for JDS

The court declined to immediately compel JDS to enforce the arbitral award, noting that:

  • the arbitration must first be converted into a judicial judgment;
  • only thereafter may the stage of compulsory enforcement commence.

This is not a substantive refusal.

It represents a technical pause, fully under the control of BNP.

What Will Happen When the Documents Are Disclosed

The confirmation of the arbitration is merely the beginning.

Once BNP gains access to:

  • financial flows;
  • intra-group transactions;
  • terms and negotiations of the deal with Silverstein,

control over the narrative will be lost. The story will no longer appear as: “the investment did not succeed.” It will begin to appear as: “who, when, and under what conditions made decisions whose consequences burdened the investor.”

Particular sensitivity surrounds:

  • the structure of the deal with Silverstein;
  • the redistribution of risks;
  • the potential shifting of losses toward the minority investor.

From this point forward, the matter may extend beyond mere enforcement of the arbitration to include:

  • new claims;
  • additional legal demands;
  • reputational and regulatory risks.

Conclusion from JDS Pulse

This decision marks a strategic turning point. JDS relied on:

  • formal corporate structures;
  • vacatur of the arbitration;
  • procedural delays.

The court sent a clear message: arbitration is not a draft, contractual obligations are not mere recommendations, and documents are not abstractions. Henceforth, the central question is not whether the documents will be disclosed, but rather what precisely they will reveal.

Question to Michael Stern

Ultimately, this process concerns not abstract SPVs or faceless “structures,” but specific managerial decisions. The Brooklyn Tower is JDS’s flagship project, and Michael Stern is its architect, public face, and the center of key decision-making. It is at this level that deals are approved, partners are selected, and determinations are made regarding whose interests—those of the project or the investor—are protected in times of crisis.

When the documents are disclosed, they will inevitably reveal not a “market error,” but a chain of decisions: who initiated, who approved, and who benefited. If it emerges that BNP’s investment was sacrificed to salvage the project, redistribute risks, or for personal gain, responsibility will cease to be collective and diffusely corporate.

This is no longer solely a matter for lawyers. It is a question of personal managerial responsibility on the part of Michael Stern—and the figures will point directly to him.

What Next

The confirmation of the arbitration has removed all procedural veils, leaving only one truly inconvenient question.

Why did the JDS structures—under the management of Michael Stern—engage in years of resistance, arbitration, and judicial escalation merely to avoid disclosing the financial documents of the Brooklyn Tower project?

Why precisely did the accounting records, bank transactions, and parameters of the deal with Silverstein Capital Partners become the line that JDS refused to allow the investor to cross?

When a flagship project, a key transaction, and a key manager converge at a single point, the narrative of “ordinary investment risk” no longer holds. What remains is a question addressed personally: what exactly in the decisions approved by Michael Stern and formalized through the deal with Silverstein makes these documents so perilous in the public light?

The answer no longer lies with lawyers or press releases. It resides in the figures. And they will now speak for themselves.