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Chabad Loses $18 Million Appeal Case in California

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According to a report on the Chabad Lubavitch web site, prior to his death, the US Ambassador to the Netherlands, Mr. Roland Arnall made an oral pledge of $18 million to Rabbi Shlomo Cunin of Chabad of California for the building of a large community center in Los Angeles.

Subsequent to his passing, Chabad says that his widow reneged on the pledge and denied its existence, prompting Chabad of California to sue the widow in court.

In February 2011, Judge Mary Ann Murphy, a Los Angeles Superior Court judge, denied the Chabad of California claims citing little evidence to prove the existence of such a pledge. The judge ruled:

“The discrepancies and lack of corroboration undercut Chabad’s case.

“It is not for the Court to decide whether Mr. Arnall actually promised $18 million to Chabad. It is for the court to determine, based on the testimony of the witnesses and exhibits admitted in evidence, whether Chabad proved by a preponderance of evidence that Mr. Arnall promised Chabad $18 million.

“The Court finds that plaintiff has failed to prove by a preponderance of evidence that Mr. Arnall promised to pay Chabad or Rabbi Cunin $18 million or any amount other than what he actually paid during his lifetime, to fund the development or construction of the Project.”

Chabad appealed the ruling based on Mrs. Arnall’s suppression of the Excel spreadsheets which include all the pledges of her deceased husband. They argued that “consideration of all of these factors yields only one conclusion here: Mrs. Arnall’s suppression of the spreadsheet gives rise to an unavoidable inference that the spreadsheet reflected the three $180,000 payments as installments on the pledge that Mr. Arnall made to Chabad.”

A few days ago, the Court of appeals of California struck down the claim, deciding to uphold the original decision, leaving Chabad without the pledge and ordering them to pay the trial cost:

“After finding that nearly every witness in this case was lacking in credibility to one degree or another, the trial court found that Chabad had failed to prove an essential element of its case, namely, the existence of a promise to donate $18 million for the new facility. In making this finding, the trial court necessarily found that Rabbi Cunin’s testimony was not credible on the fundamental question regarding the existence of an oral pledge. Because the adverse credibility determination was based on substantial evidence that Chabad does not dispute on appeal, there are no valid grounds to overturn the trial court’s findings.

“The judgment is affirmed. Mrs. Arnall is awarded her costs on appeal.”

Chabad of California has been facing mounting financial debt in recent years, due to a large increase in Chabad activities and a large fall in donations after the financial crisis and market meltdown. This modus operandi, known as “Shlichus Now Pay Later,” has been the hallmark of Rabbi Cunin’s Shlichus, following the blessing of the Lubavitcher Rebbe of “Lechatchila Ariber Un Ariber.” With the Rebbe’s blessings he always got bailed out at the 11th hour by what can only be defined as the Hand of G-d…

In the mid-1980’s, Chabad of California ended up with $18,000,000 in debt and on the verge of collapse. At the last moment he was saved by receiving the estate of Mrs. Hermine Weinberg, an elderly woman who was estranged from her family and the only one who listened to her was Rabbi Cunin.

After her death, her family took Chabad of California to court to contest the will, and Rabbi Cunin immediately traveled to New York to ask the Rebbe for a blessing that he win $18,000,000 so he can pay back all his debts to the banks. The Rebbe responded with a blessing for success in paying his debts “and some extra.” Rabbi Cunin returned to California and pressed on with the lawsuit, ending up with $21 million, which was only a part of the estate but still more than his debts.

In conversation with some Chabad Chassidim in California, they all said that with the Rebbe’s blessings, Rabbi Cunin will surely endure and come out on top of the game, paying yet again all his debts and receiving enough funding to expand the programs of Chabad of California.

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