The Real Deal New York

Hilfiger fails with $26.2M lawsuit

August 28, 2008 05:41PM
By Adam Pincus

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A Manhattan state court judge rejected a $26.2 million lawsuit brought by clothing designer Tommy Hilfiger’s company against two entities involved with the $53 million purchase of his Midtown building in 2005, according to a ruling published today.

Hilfiger claimed in the June 2007 breach of contract lawsuit against the entities that he was due $5.4 million that was never paid.

Hilfiger sold 25 West 39th Street in December 2005 for $53 million to a company called 25 West 39th Street Realty. Included in the sale contract was a clause that gives Hilfiger a cut of any sale recorded with a deed before December of 2006.

25 West 39th Street Realty was wholly owned by 25 West 39th Street Holdings, which had an address at the Chetrit Group, a low-profile but substantial real estate family.

Chetrit’s 25 West 39th Street Holdings sold a full interest in the building for $80 million in September 2006 to the current owner of the building, Thor Equities, a real estate property and management company. The sale was of the controlling interest and not the property, so no deed was filed, the judge wrote.

By the terms of the 2005 contract that allocate 20 percent of the difference between the $53 million sales price and any sale within a year, Hilfiger claimed he was due $5.4 million.

But Manhattan State Supreme Court Justice Richard B. Lowe, ruled August 21 that the September, 2006, transfer was not technically a sale since no deed was transferred, as specified in the contract, and rejected the suit. The decision was announced today.

Hilfiger’s attorney and a spokesman for Thor Equities had no comment. Calls to the Chetrit Group were not immediately returned.

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