Sunday, September 14, 2008
Plaza Hotel Owner Is Sued
A buyer who agreed to pay $53.5 million for two penthouse condominiums in New York's Plaza Hotel sued developer El-Ad Properties NY LLC for fraud, seeking a refund of his $10.7 million deposit and more than $20 million in damages.
The lawsuit, filed Sept. 5 in New York State Supreme Court, is one of the highest-profile examples of the mushrooming legal actions by condo buyers throughout the country because of the collapse of home values. Until recently, Manhattan's luxury-condo market was relatively unscathed by the crisis, but it is beginning to show signs of stress.
The lawsuit names the buyer of the penthouses only by corporate names, but people familiar with the deal identified him as Andrey Vavilov, a financier and former deputy Russian finance minister. Plaintiff's attorney Y. David Scharf wouldn't confirm or deny if Mr. Vavilov is the buyer. Mr. Vavilov didn't respond to an email for comment.
The suit alleges that El-Ad engaged in a "bait and switch" in which the developer made -- and failed to disclose -- "unilateral and impermissible design changes" that diminished the condos' size, shrank windows and lowered ceilings.
The lawsuit states that the penthouses were purchased "sight unseen," based on representations by El-Ad and models, since the units hadn't been built. Yet instead of the promised elegance, "the completed penthouses utterly fail to live up to the representations...of superior condition, quality and overall appearance," the suit says.
El-Ad paid $675 million for the Plaza in 2004 and says it has spent $500 million renovating the property.
El-Ad dismissed the allegations as baseless. Jay Neveloff, a lawyer representing the developer, in a statement said: "Its meritless allegations are aimed at camouflaging the purchaser's failure to meet his legal obligations to close" the purchase.
El-Ad declared the buyers, named Penthouse 2009 Inc. and Penthouse 2011 Inc., in default when they refused to follow through with the purchase and kept deposits of $10.7 million.
Write to Jonathan Karp at jonathan.karp@wsj.com
3 comments:
Hi
I think that is so sad news for owner of plaza hotel.There are many properties in Natal for and you can search about the real estate of natal to Property in Natal.
Hi
I think that is so big damage in this hotel.It is a sad news for the owner of this hotel.There are available many properties for sale and you can search to Bucharest property.
The sad news for the owner of this hotel.I think it may be desaster.You can bought more real estate for use. you can search about real estate to Sofia property.
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