The Real Deal New York

Swig sued for failing to pay $533K in benefits at 25 Broad

April 09, 2009 03:55PM
By David Jones

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Months after Lehman Brothers filed to foreclose at his 25 Broad condominium project in the Financial District, developer Kent Swig is facing additional litigation for failing to pay $533,000 in benefits awarded by an arbitrator.

The trustee of the Building Service Local 32 BJ health and pension fund is asking for a judgment against 25 Broad, alleging the developer has failed to pay the benefits, weeks after the hearing.

“This legal action is the unfortunate result of the pending Lehman bankruptcy and will be resolved in due course,” a spokesperson for 25 Broad said in a statement.

Lehman, which filed for Chapter 11 bankruptcy in September 2008, filed suit in January to foreclose on 25 Broad Street, alleging Swig Equities defaulted on a $231 million senior mortgage as well as other loans. Swig originally bought the rental building for $260 million, with plans to convert the property into luxury condominiums.

Swig has blamed the 25 Broad foreclosure on Lehman’s financial troubles, arguing the investment bank blocked efforts to build his Nobu Hotel and Residences at 45 Broad. Swig planned to transfer the air rights at 25 Broad to build 45 Broad, which was slated to be a 62-story condo hotel.

As The Real Deal previously reported, Swig is facing more than $7.7 million in mechanic’s liens at 25 Broad, and a former Swig Equities broker filed suit seeking back commission payments at the condominium.

Following the January foreclosure filing, less than 10 contracted condo buyers at 25 Broad continued to reside at building under interim rental leases.

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