Gamma Real Estate, the mezzanine lender on the beleaguered condominium project at 3 Sutton Place, is suing real estate investors Philip, Michael and Seth Pilevsky, alleging they helped developer Joseph Beninati to file for bankruptcy at the project in order to take a piece of it.
In June 2015, Gamma lent Beninati’s Bauhouse Group about $147 million to fund the planned 113-unit, 68-story condo tower. In January, the Bauhouse-controlled LLC That Owns The Sutton Place project defaulted on Gamma’s loan, and a month later filed for Chapter 11 bankruptcy protection to ward off foreclosure. According to Gamma’s complaint, the Pilevskys loaned Beninati $50,000 to hire a law firm (where a fourth Pilevsky is a partner) to execute the bankruptcy proceedings in the nick of time. The Pilevskys were not previously involved with the Sutton project, Gamma claims.
“Defendants, who were strangers to the Project, intentionally and improperly caused these contractual breaches in a scheme to benefit themselves and obtain an ownership interest,” Gamma’s lawsuit states.
The suit is the latest chapter in a drawn-out legal battle over the site. In July, Beninati sued Gamma for allegedly conspiring with his cousin, who is Beninati’s lawyer, to take control of the Sutton property “and reap the greedy reward.”
Neither the Pilevskys nor the lawyers representing Gamma could immediately be reached for comment
The Real Deal reported that at the time of the bankruptcy filing, the property located at 428-432 East 58th Street, was valued at $270 million, and up to $1 billion once the proposed Norman Foster-designed tower gets built, according to an appraisal by Cushman & Wakefield [TRDataCustom].
Philip Pilevsky of Philips International, father to Michael and Seth, is an investor in the Bryant Park Hotel and 250 Church Street. Together with Joseph Tabak, he made a $2.1 billion bid for the Empire State building in 2013.