It was a contentious dispute among former leaders of Fairstead, one of the nation’s major apartment landlords. A recent decision by the Delaware Court of Chancery has provided new details about the breakup and legal battles within the company.
Fairstead, founded in 2014, expanded rapidly to hold $7.8 billion in assets and oversee 24,000 housing units across 28 states by 2022. However, internal disagreements led to lawsuits involving co-founders and senior executives.
John Tatum III joined Fairstead in 2016 to develop its low-income housing tax credit division. As that segment grew, Tatum sought greater equity alongside co-founder William Blodgett. Their request triggered conflict with other partners, including backer Stuart Feldman and co-founder Jeffrey Goldberg.
The court case involved ten witnesses and nearly 2,600 exhibits. Vice Chancellor J. Travis Laster issued a detailed opinion largely favoring Tatum. The ruling determined that Tatum’s equity in a Fairstead fund was worth $7.8 million—a figure relevant for an upcoming case brought by Blodgett.
Laster described the firm’s founders as “a hedge fund manager with capital, an attorney with legal savvy, and an entrepreneur with energy and vision,” referring to Feldman, Goldberg, and Blodgett respectively.
Tatum expanded Fairstead Affordable through low-income tax credit deals between 2017 and 2022, generating developer fees totaling $181 million. According to Laster: “Blodgett and Tatum came to believe that they had created significant value (they had) and deserved a substantial, even controlling equity stake in the business.”
Despite their contributions—Tatum held only a 5.25 percent stake while Blodgett controlled 9.71 percent through an LLC—the majority interest remained with Feldman and Goldberg. Efforts by Tatum and Blodgett to restructure ownership or launch a new venture were unsuccessful.
Internal communications showed growing frustration among leadership over control of the company. In summer 2020, Tatum and Blodgett consulted outside counsel on both restructuring options and starting anew; Blodgett also approached potential investors linked to his family ties.
By early 2021 negotiations stalled when Goldberg proposed a long-term incentive plan rather than direct restructuring or increased equity for Tatum or Blodgett.
Eventually suspicions arose within Fairstead about plans for a rival business after IT staff intercepted related correspondence from Blodgett’s law firm in September 2021. This led Feldman to terminate Blodgett for cause—canceling his equity—and prompted Tatum’s resignation soon after.
After leaving Fairstead but still working during his notice period, Tatum rejected what he considered an inadequate offer for his equity stake; subsequently Fairstead retroactively terminated him for cause as well. Litigation followed: Tatum sued over forfeited equity while Fairstead countersued regarding confidential documents downloaded by Tatum before his departure.
Attorney Michael Carlinsky declined comment on behalf of Fairstead regarding ongoing litigation.
In court proceedings Goldberg denied knowledge of efforts by Tatum or Blodgett seeking more control or being encouraged toward restructuring proposals; Feldman denied discussing joint ventures with Blodgett altogether.
However Judge Laster wrote: “The contemporaneous documents show that Goldberg both knew what Blodgett and Tatum wanted and was trying to steer them toward possibilities that Feldman might find acceptable.”
Ultimately the court found that canceling Tatum’s equity interests was done in bad faith; he was awarded approximately $7.8 million based on his appraiser’s valuation—with total damages nearing $10 million before interest when including additional incentives from two sales transactions—while Fairstead received about $155,000 covering costs related to investigating contract breaches tied to document downloads by Tatum.
Most claims against him—including breach of fiduciary duty—were rejected except for violation concerning company documents taken at exit.
Tatum commented following the decision: “What followed my exit was an orchestrated attempt by Fairstead to erase that legacy by assaulting my character, burying me in litigation, and taking what was rightfully mine… The court’s thorough decision sets the record straight.” His legal team included Sara Shaw Tatum—a litigator who is also his wife.
Lawyers representing Blodgett declined comment on pending matters; it remains uncertain if future rulings will mirror those made regarding Tatum’s case against Fairstead.
