The Real Deal New York

Vijay Mallya, daughter avoided foreclosure on Trump Plaza PH

Tanya Mallya was initially "unable to pay" her $10M share of the co-op board's $185M land lease: documents

March 14, 2016 10:30AM
By Farah Halime

Vijay Mallya Trump Plaza 167 East 61st Street

Vijay Mallya and the Trump Plaza at 167 East 61st Street

The daughter of one of India’s best-known businessmen, Vijay Mallya, reached a special agreement that delayed a foreclosure on her trophy Trump Plaza penthouse last year as her liquor baron father’s financial problems mounted, according to documents reviewed by The Real Deal.

Tanya Mallya, a student at Columbia University who lives in a penthouse comprised of seven co-op units at 167 East 61st Street, was handed a “forbearance agreement” by the Trump Plaza co-op board in February 2015 because she was unable at the time to pay her share of the $185 million land lease.

She owed $10.1 million as part of a resident assessment to buy the underlying land at Trump Plaza, according to a forbearance agreement between the Plaza owners and Tanya Mallya, whose name is on the deed. The family has since reached an agreement with the co-op board, according to a person familiar with the matter.

The forbearance agreement is a formal contract between lender (Trump Plaza co-op board) and borrower (the Mallyas) to delay a foreclosure proceeding when the borrower cannot make required payments.

Michael Greenberg, a lawyer representing Vijay and his daughter, declined to comment.

Vijay purchased the units over time, including some in 2010, for his daughter but his fortunes as India’s so-called “King of Good Times,” have since taken a nosedive. He recently agreed to step down from his position as chair of United Spirits (though he received a $40 million sendoff) and was accused of funneling funds to other parts of his business empire in an effort to save the now-defunct Kingfisher Airlines. Several news outlets reported last week that Vijay, described by some as India’s version of Richard Branson, absconded and owes various creditors over $1 billion. He’s taken to social media to deny the charges.

Documents suggest Vijay’s financial struggles in recent years resulted in the family being initially unable to cough up the $10.1 million to cover its share of the land lease buy. Neither Vijay Mallya nor his daughter responded to requests for comment.

In 2014, the co-op board agreed to pay $185 million for the underlying land after the land’s owner put it up for sale. Some residents chose to sell their apartments instead of forking upwards of $1 million to pay their assessed share of the land lease purchase.

A loan was obtained by the co-op “in anticipation that certain tenants would be unable to pay their pro rate share of the assessment,” according to the forbearance agreement, and was issued to owners who could not make the payments up front.

The Mallyas were on that list, though it seems any issues have since been resolved.

“We don’t have an issue with Mr. Mallya,” said Marc S. Cooper, the president of the Trump Plaza co-op and CEO of Peter J. Solomon Company, declining to comment on the matter further.

Because of the land lease history, sellers have had a tough time finding buyers for the Trump Plaza. There are currently 11 apartments for sale in the building, according to Andrea Lucas, a Corcoran Group broker who is representing a seller who has reduced the asking price for their four-bedroom apartment from $6 million to $5.4 million.

“The building has a bad reputation,” Lucas said. “A lot of brokers still stay away from it thinking there’s still a land lease.”

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