The Real Deal New York

Mann files to block Apthorp loan restructuring

March 11, 2009 06:14PM
By David Jones

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Less than two months after reaching a settlement agreement, developer Maurice Mann has filed a lawsuit to block Anglo Irish Bank, Africa Israel and the Feil Organization from executing a new loan agreement at the struggling Apthorp condominium conversion project on the Upper West Side.

Mann filed suit in New York State Supreme Court March 6, alleging that the restructured loan agreement is being negotiated without Mann’s consent, and that a proposed construction budget for the property would force him to assume greater financial risks. Mann alleges that the lenders had extended the deadline for a new loan agreement until March 14.

“Defendants and the lenders have been in the process of negotiating amendments to the loan documents which provide, inter alia, that a construction budget will be approved which has the effect of increasing Mann’s recourse guarantees,” Mann claims in the suit.

Mann and Lev Leviev acquired the 163-unit landmark building at 390 West End Avenue in 2007 for a record $426 million.

The suit names senior lender Anglo Irish Bank, mezzanine lender Arefin US Investment, Africa Israel affiliate AI Apthorp and Broadwall Management of Apthorp, a Feil Organization unit that manages the Apthorp.

Several Apthorp investors and executives were also named as defendants, including Richard Marin, chairman of Africa Israel USA and Andrew Ratner, executive vice president of the Feil Organization.

Richard Marin, chairman of Africa Israel USA and AI Apthorp, denied most of the allegations in a March 9 court filing, in response to Mann’s complaint. They dispute Mann’s charges that he has been frozen out of negotiations, noting that the January 13 settlement came about because of an arbitration proceeding before Justice Joan Madden, and added the following: “Plaintiff was invited to and/or did participate in all meetings with the lenders and plaintiff is unreasonably withholding his consent to the modification of the loan documents.”

Also on March 9, Mann separately filed a $50 million suit against Ralph Braha, president of footwear company Braha Industries and an investor at the Apthorp, alleging breach of contract.

Mann alleges that Braha originally agreed to appoint investor Morris Ades as the third member of the Apthorp Management board, and that Braha would vote with Mann as long as he was on the board. Mann alleges that Braha went back on his word by denying the appointment of Ades and not supporting Mann.

Braha was not immediately available for comment.

As reported earlier, Mann launched the legal dispute in December when he filed suit against Anglo Irish Bank and Apollo Real Estate Advisors, claiming they wrongly declared the mortgage loan out of balance and were threatening to foreclose on the building unless he made a $22.7 million “ransom” payment.

In late December, Leviev filed for an injunction against Mann, alleging he mismanaged the building, allowed construction spending to spiral out of control and was illegally warehousing apartments. The two parties later settled under a prior agreement that called for a rabbinical arbitrator to resolve the dispute.

Under the settlement, Mann stepped down as managing partner, but the restructured group was asked to come up with a new business plan to prevent the Apthorp from going into foreclosure.

Ratner declined comment. Anglo Irish officials were not immediately available for comment. Africa Israel said it had no comment. And Mann’s attorney, Theodore Steingut, was not immediately available for comment.

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