The Real Deal New York

One Madison Park developer challenged by investment partners

December 30, 2010 05:49PM
By David Jones

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Ian Bruce Eichner (top), Ira Shapiro and One Madison Park

One Madison Park developer Ira Shapiro is facing a new lawsuit from a group of European investors that claim he erroneously approved the bankruptcy and a rescue deal from Ian Bruce Eichner for the Flatiron condominium project without consulting with his majority partners.

Monaco-based Green Bridge Capital S.A. and Special Situation S.A., led by CEO Cevdet Caner, filed suit Dec. 15 in U.S. Bankruptcy Court in Delaware, alleging that Shapiro held only a 32.5 percent stake in Slazer Enterprises, and must therefore consult his partners on all major decisions.

In June, a group of three investors, represented by Manhattan super lawyer Barry Slotnick, forced the condo into bankruptcy earlier this year. Just last month, Shapiro entered a $40 million deal with investor Eichner, on a rescue plan to get the troubled project completed.

Lawyers for Green Bridge, in court documents, contend the company owned 25 percent of Slazer Enterprises and that the entity Special Situations was granted the rights to another 32.5 percent from investor Marc Jacobs, who was Shapiro’s partner in the project.

“Defendant, as holder of a 32.5 percent membership interest in Slazer Enterprises, acting alone, has no such authority [to make unilateral decisions],” Morris James attorney Brett Fallon, who represents Green Bridge Capital, wrote in the Dec. 15 complaint.

Lawyers for Shapiro, in court documents, argued that these investors made no previous effort to get involved with running or rescuing the condo, and now have filed court documents that are defective.

While Shapiro spent the last nine months working to save the condo, the plaintiffs were “4,000 miles away, spending none of their time or money, doing nothing whatsoever for any of the debtors,” attorney Bruce Grohsgal, representing Shapiro, wrote in court filings.

Caner, a billionaire Turkish-born real estate investor made an $18 million loan in 2007 to Shapiro through his former company, Level One, where he was CEO. In exchange, he received a pledge for a 35 percent stake in Shapiro’s Slazer Enterprises, which developed One Madison Park. Caner was involved in some high-profile financial problems himself, including a case where Level One defaulted on $2 billion to Credit Suisse and Caner faced eviction from a $31 million London townhouse.

The investors are demanding a temporary restraining order to block Shapiro from making any more decisions on behalf of the condo, which has been filed into foreclosure by iStar Financial and is currently being run by a court-appointed receiver.

New York Attorney General Andrew Cuomo previously shut down sales at the building after The Real Deal reported that multiple investors were pledged apartments in the building in return for loans that went into default. Dozens of lawsuits were filed against the developers and, as The Real Deal previously reported, the Rockland County district attorney is investigating alleged forgeries involving promissory notes made to these investors.

Lawyers for Jacobs said he would still like to see the project completed, but denied that he had anything to do with the Eichner deal.

“Mr. Jacobs had nothing to do with retaining Mr. Eichner,” said Lawrence Mccarron, attorney for Jacobs.

A full court hearing on the Green Bridge lawsuit is scheduled for Jan. 10.

Neither Shapiro nor Eichner were immediately available for comment. Fallon and lawyers for iStar declined to comment.

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