The Real Deal New York

Bizzi & Partners stiffed adviser over $370M Setai debt refinancing: lawsuit

Pompeo Locatelli says he's owed $356K in unpaid fees

December 23, 2015 03:35PM
By E.B. Solomont


From left: Davide Bizzi, 400 Fifth Avenue and Pompeo Locatelli

A financial consultant who claims he saved Bizzi & Partners Development from financial ruin after the Italian developer defaulted on loans for the Setai Hotel and Residences says he is owed $356,200.

Pompeo Locatelli, an independent financial advisor based in Milan, said the multinational developer is refusing to pay him even though he restructured $370 million worth of debt related to Bizzi’s construction of the Setai, located at 400 Fifth Avenue in Midtown South, according to a lawsuit filed Dec. 22 in New York State Supreme Court. A 2013 employment contract between Locatelli and Bizzi did not specify Locatelli’s fees and the developer allegedly refused to even discuss compensation, the suit states.

Bizzi did not immediately comment on the allegations in the lawsuit.

In the complaint, Locatelli says Davide Bizzi’s firm contacted him in May 2012 as it was “teetering on the brink of financial collapse.” He claims the developer racked up $370 million worth of debt to fund the construction of the Setai – comprised of 163 condos and a 214-room hotel – but Bizzi defaulted on loans from its creditors, which included at least 15 Italian banks and financial institutions. A deal to sell the hotel portion of the project also fell through, the complaint states. “To avoid insolvency, 400 Fifth had to restructure its debt,” Locatelli says in the complaint.

According to Locatelli, he signed a 12-month agreement in March 2013 to negotiate with lenders on Bizzi’s behalf and to find a new buyer for the Setai hotel. His fees were left unspecified in the agreement, which purportedly stated that Locatelli’s compensation “would be agreed [to] during the course of the advancing activity.”

In 2013, Great Eagle Group purchased the Setai Fifth Avenue hotel for $229 million.

After restructuring the debt, Locatelli sent Bizzi an invoice for $260,000 in June 2014, according to the suit. Locatelli argues that Bizzi has not only “rebuffed Locatelli’s efforts merely to discuss a reasonable fee for his services,” but it has also “refused to pay Locatelli anything for the services he performed,” the suit states.

Locatelli is seeking more than $350,000 — his fee, plus interest.

Based in Italy, Bizzi is behind several high-end condominium projects in Manhattan, including 101 Leonard Street, a 66-unit tower in Tribeca.

Bizzi also partnered with developer Michael Shvo last year on the acquisition of 125 Greenwich Street. Shvo teamed with Bizzi, Howard Lorber’s New Valley and an unidentified Chinese company to arrange $240 million in debt and equity for the acquisition and development of the residential project.

Bizzi and Shvo – with Halpern Real Estate Ventures, Itzhaki Acquisitions and Aronov Development – are also planning a 25-story residential building at 100 Varick Street, known as 565 Broome Street, that will have 115 units and is set to launch this spring. The parties acquired the site for $130 million in January 2014.