The Real Deal New York

Apthorp threatened JPMorgan with lease termination, lawsuit says

February 06, 2009 05:44PM
By David Jones

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JP Morgan Chase, which owns a bank branch at the landmark Apthorp condominium, was threatened with a lease termination just days before a legal feud erupted between co-owners Maurice Mann and Lev Leviev, according to court records.

The New York-based bank filed for a preliminary injunction in New York State Supreme Court alleging that the landlord, Apthorp Associates, issued a notice of default on December 4, 2008, which threatened to terminate JPMorgan’s lease if the default wasn’t cured by January 10, the court documents, released yesterday, show.

JPMorgan attorneys, who asked not to be identified, said the dispute involved renovations taking place at the bank branch, located at 2213-19 Broadway on the corner of 79th Street, however they denied there was any risk of actually being evicted.

While court records do not specify what led to the alleged default, they show that the bank [formerly Chase Manhattan] has operated a branch at the building since 1968 and sources say the bank paid more than $1 million in annual rent for the ground-floor retail space.

“We’re actually having some very fruitful negotiations with the landlord and we’re hoping to nip the litigation in the bud,” said the attorney. “We fully expect it to be resolved amicably.”

Apthorp Associates, led by Mann, actively pursued evictions and buyouts of retail stores and market-rate tenants since the 2006 acquisition of the building for a record $426 million. In December 2008, senior lender Anglo Irish Bank and mezzanine lender Apollo Real Estate Advisors demanded that Mann come up with $22.7 million in additional investments to prevent the building from going into foreclosure. Mann then filed suit against the lenders alleging a scheme to steal the building away from him.

Leviev, chairman of AFI Group, filed for an injunction against Mann in December, and asked the state Supreme Court to force the two partners into arbitration. In January, Mann was replaced as managing agent of the building by Broadwall Management, a unit of the Feil Organization.

Leviev, Mann and their new management team have been racing against a deadline to file a revised business plan with the lenders to prevent the building from going into foreclosure. The deadline was extended from the end of January until today. Sources familiar with the talks said the Apthorp would likely lower condo prices and could covert the building back to a rental, but it remains unclear whether the business plan was submitted today.

Anglo Irish Bank and Apthorp officials were not immediately available for comment.

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