The Real Deal New York

Co-op City’s management shakeup may violate state rules

Not to mention a $621M refinance deal with Wells Fargo

December 28, 2014 05:00PM

Co-op City and Cleve Taylor, president of RiverBay's Board of Directors

Co-op City and Cleve Taylor, president of RiverBay’s Board of Directors

Co-op City shareholders booted its management company last month from the massive Bronx Mitchell-Lama complex. But that move may have violated state regulations and the terms of a $621 million refinancing deal.

Homes and Community Renewal, the agency that oversees state-administered affordable housing, sent a letter to RiverBay, which oversees the co-op’s 15,000 apartments, claiming that ousting management was indeed a violation of state regulations and its contract with Wells Fargo, according to the New York Daily News.

The management company, Marion Scott Real Estate, also filed a lawsuit in state Supreme Court Wednesday seeking damages for breach of contract, defamation and trespassing.

“We turned this place around and I don’t want to see it go into the toilet,” Marion Scott principal and general counsel Herb Freedman said. “Don’t malign us and let it go down the drain.” [NYDN]Christopher Cameron

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