Mendel Paneth, the former editor-in-chief and co-owner of the popular Yiddish-language Kindlein children’s magazine has sued several rabbinical courts and his former business partner, alleging a conspiracy to sabotage his business and deprive him of a livelihood as punishment for defying a rabbinic judgment.

In a lawsuit filed under the Racketeer Influenced and Corrupt Organizations Act, or RICO, in the U.S. Bankruptcy Court of the Eastern District of New York, Paneth claims that investor David Reiner used money and influence to sway leading Haredi rabbinical courts to coerce Paneth into a rabbinic arbitration process over disputes relating to the operation and management of Kindlein magazine.

In January 2021, Paneth resigned from Kindlein and opened a new, competing magazine, Hundert, and brought the dispute with his former partner into secular court, contrary to certain rabbinic orders.

Paneth claims that the rabbinical courts, which have enormous social and economic power within New York’s Haredi community but are entirely unregulated and lack any form of oversight, used threats of social and economic ostracism to force their will.

After he gave in to their demands, Paneth claims another rabbinical court released a writ anyway calling for a boycott of his new magazine. Ultimately, the complaint says, the rabbinical courts and Reiner collectively violated the Sherman Antitrust Act by colluding to put Paneth out of business and thereby eliminate Reiner’s only competition. They also sought to deprive Paneth of any employment opportunities and to ostracize him from the Hasidic world, the complaint says.

The RICO suit, a highly unusual step taken against New York’s rabbinical court system, casts a wide net and names several leading courts as defendants, including Bais Din of Mechon L’Hoyroa, in Monsey, N.Y., one of the most prominent rabbinical courts in the region, and Beth Din CRC, also known as Beit Din of Hisachdus, affiliated with Satmar, the largest Hasidic group in New York. 

Rabbinical courts operate according to Orthodox Jewish law, which includes a framework for resolving civil disputes and forbids taking litigation to secular courts without a rabbinic dispensation.

In practice, rabbinical courts ask parties to sign arbitration agreements, so that, at least in theory, their rulings would be binding in secular courts, where cases may end up if either party refuses to cooperate with the rabbinic ruling. When that happens, rabbinical courts will issue a writ against the noncompliant party for “refusing to heed a Torah ruling.” In effect, such a writ calls on the public to ostracize the disfavored party socially and economically.

It is this process Paneth claims he has fallen victim to. 

“Being a very religious person, and having been trained at a Yeshiva in Israel, I always thought that, at the core, all people are good,” Paneth writes in one of his legal filings, which include one written in the first person and illustrated to look something like an issue of Kindlein. “Shame on me.”

Paneth claims he had a dispensation from a prominent rabbinic authority to bring the action into secular court, but the rabbinical courts took punitive action against him anyway. Those rabbinical courts included Beis Din CRC, Beis Din of Mechon L’Hoyroa, and the Galanta rabbinical court, among others.

The complaint is one of the latest developments in a tangled dispute between Paneth and Reiner, with claims and counterclaims filed in both rabbinic and civil courts going back to 2020.

Neither Paneth nor Reiner agreed to be interviewed for this article, but hundreds of pages of legal documents tell their own story. Paneth has also told his side of the story in a letter to his magazine readers in 2022, as well as numerous posts on the Telegram social media platform — which show purported emails exchanges between him and several rabbinical courts — and in videos on his YouTube channel.

Kindlein was first launched in 2014, when Paneth, a graphic artist, came up with the idea to start a magazine for Hasidic children. 

“I realized that ultra-Orthodox children were missing an important element in their education: learning about the world outside their close-knit community,” he says in his complaint. 

As Paneth lacked business experience — he was a school teacher prior to starting the magazine — a mediator introduced Paneth to Reiner, an investor with a reputation as a wealthy businessperson, who invested $150,000 to get the magazine off the ground.

By all accounts, the venture was highly profitable. According to a legal filing by Reiner, the magazine earned a net profit of $500,000 per annum. By 2020, however, various disputes began to pile up between the partners.

In his complaint, Paneth alleges that upon realizing Kindlein’s success, Reiner, whom Paneth casts as a shrewd and scheming character, manipulated his way into a controlling share of the business, then began to treat Paneth as an employee rather than a partner. He also says Reiner diverted company funds for personal benefit, locked Paneth out of company bank accounts, deprived Paneth of profits owed to him, and orchestrated “a modern-day saga of subjugation and peonage” in which Paneth was to be “indentured” to Reiner in perpetuity.

But the most onerous actions alleged in the complaint have to do with the rabbinical courts, whom Paneth accuses of exercising their power in an arbitrary and capricious manner. While rabbinical courts have no legal power under secular law, they are empowered by their communities, where fervent belief in and reverence for rabbinic authority is near axiomatic.

While Paneth initially turned to a rabbinic judge to serve as an arbitrator and resolve the partnership disputes, he says he subsequently found that the fees were exorbitant and the proceedings protracted with no end in sight due to Reiner's many requests for additional sessions. He also claims the arbitrator showed overt partiality toward the other, more moneyed, party, laughing along with Reiner's bullying comments toward Paneth, and that the case ended in a stalemate, with the rabbi unable or unwilling to enforce his own decisions.

That’s when Paneth decided, after consulting with other rabbis, to file the action in secular court. He also resigned from his position at Kindlein and launched a new magazine, Hundert.

Paneth says that several different rabbinical courts — with whom he’d had no prior contact and who had not been involved in prior proceedings — then contacted him to insist he withdraw the action from secular court and sign a new arbitration agreement with one of them, threatening to issue a writ of noncompliance if he failed to do so. According to Paneth, telephone and email records show that these courts were acting in collusion with Reiner.

After he conceded to these rabbinical courts’ demands, another rabbinical court, Beis Din Beis Yoseph, in Borough Park, which had not even contacted Paneth at all, issued a writ of noncompliance anyway, also ostensibly due to pressure from Reiner, Paneth says. While the rabbinical courts that had threatened him were unwilling to assist in getting the writ removed, Paneth nonetheless obtained letters from several other rabbis explicitly nullifying the Beis Yoseph writ. But Reiner already had what he needed.  

“Original Kidline publishers are preparing for a fiery war against the magazine Hundred,” Mendy Reiner, David Reiner’s brother, posted on social media around that time, the suit says. Mendy Reiner is the head of Renewal, a celebrated Haredi organization that facilitates kidney donations, and the founder of the Save Maimonides campaign, an effort to overhaul the administration of Borough Park's Maimonides hospital.

According to Paneth, David and Mendy Reiner took the text of the Beis Yoseph writ and turned it into posters and flyers, which were then plastered onto street poles in Haredi neighborhoods, handed out on sidewalks, and distributed to store owners. Paneth claims the Reiners also organized a “crew,” including some paid individuals, to intimidate store owners against selling Paneth’s Hundert magazine, hide it so that shoppers wouldn’t find it, and even “forcibly” remove it from magazine stands. The complaint alleges that the Reiners then orchestrated a smear campaign against Paneth in an avalanche of posts calling him a “thief” and a “crook,” which spread across social media platforms like WhatsApp, which is widely used by Haredim. Paneth lays considerable blame for these actions on the rabbinical courts named in the suit, for their active or tacit support of a bullying party.

Paneth, who had spent a lifetime dreaming of producing children’s literature in comic book and graphic form and pioneered the form to Yiddish-speaking Hasidic children, said he was shattered by Reiner’s actions, suffering not only economically but also developing serious health issues and enduring extreme emotional distress.

While Reiner had remained largely uninvolved with day-to-day production of the magazine, Paneth had overseen a team of writers, graphic artists, and other employees to produce each weekly issue, to which he brought a passionate artistic and creative vision. Hundert, his new endeavor, ultimately failed, he says, due to the actions of the Reiner brothers and their “crew.”

According to Paneth, the Reiners’ actions not only forced him to close Hundert magazine, but also to be unable to find employment and to be effectively “excommunicated” from the Hasidic world. In one example he cites, Paneth, who is also a talented cantor, was hired by the owner of the Raleigh Hotel, a popular Catskills vacation spot for Hasidic families, to lead services during an eight-day Passover program. A day after ads for the program appeared, Paneth was notified by the hotel owner that his services were canceled, allegedly due to pressure from the Reiners.

Reiner, for his part, wrote in court filings that Paneth misconstrued the terms of their agreement, owes Kindlein hundreds of thousands of dollars for a loan he received toward the purchase of a home in 2017, and that Paneth’s new publication, Hundert, had used Kindlein’s office space, equipment, and employees and should’ve been subject to the same terms as that of Kindlein. Their partnership agreement, Reiner claims, was to cover any and all such related enterprises “for an unlimited period of time.” 

Reiner also alleges that by resigning from Kindlein, Paneth caused $1.7 million in damages to Kindlein’s production company, Kidline Enterprises, Inc., since the company had relied entirely on Paneth to produce the magazine, which was its sole product. Reiner also argues that by resigning from Kindlein, Paneth violated his fiduciary responsibility as a shareholder.

In the meantime, litigation on the case is ongoing. Last week, a judge issued an order denying a request by Reiner to compel Paneth to return to rabbinic arbitration.

Beis Din Beis Yoseph and the other rabbinical courts named as defendants in the suit did not respond to Shtetl’s request for comment. Mendy Reiner declined to be interviewed, saying he would only respond in court.