The Real Deal New York

Levy sued to block Anglo foreclosure

February 27, 2009 05:14PM
By David Jones

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Developer Yair Levy filed suit against Anglo Irish Bank seeking to block the lender from foreclosing on Rector Square, his struggling condominium in Battery Park City, according to court documents.

Levy alleged that Anglo Irish failed to comply with obligations under a September 2007 loan agreement, in which the Dublin-based bank agreed to lend $165 million towards the conversion of the 225 Rector Place apartment building.

The suit, filed on January 29 in New York State Supreme Court, asks for $23 million in damages and a preliminary injunction against the foreclosure. The suit names Anglo Irish, Fortress Credit Opportunities and Drawbridge Special Opportunities Fund, who were the plaintiffs in the foreclosure case.

The suit was filed less than two weeks before the February 9 foreclosure filing by Anglo Irish against Rector Square. For reasons that are unclear, Levy filed the Supreme Court suit in Nassau County, claiming jurisdiction because he lives in a $5.5 million mansion in Kings Point, N.Y.

Anglo Irish declined to comment on the case. Levy’s attorneys were not immediately available for comment.

Meanwhile, on Thursday afternoon the New York attorney general’s office met with Lower Manhattan officials as well as attorneys for tenants and unit owners at Rector Place. Ken Demario, chief of the attorney general’s real estate finance bureau, led a group of four officials from the office, which regulates co-op and condominium conversions.

“He sent a very unambiguous message that the rights of the tenants [and homeowners] are going to be protected,” said Michael Miller, a New York trust lawyer who was named receiver of the building earlier this week.

He also praised Anglo Irish Bank for giving him the resources to manage the property.

“They have been genuinely cooperative in helping me do some of the preliminary things to get the ball rolling,” he said.

Miller is still waiting to secure insurance for Rector Square, adding that the complexity of the case is making it very difficult and expensive to secure a policy. Receivers are required to obtain surety bonds and insurance to protect the property against theft or other damages.

Attorney Marc Held, who represents unit owners at Rector Square, said that existing unit owners may be eligible for restitution and abatement of some monthly charges.

“Those people have many rights,” Held said. “Those rights may include getting their contracts back and the refund on their [deposits].”

Officials at attorney general’s office were not immediately available for comment.

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