Lawyers for developer Trevor Davis today urged a U.S. Bankruptcy Court judge to allow the sale of six condominium units at his troubled project at 1055 Park Avenue, claiming he has signed contracts for five units and expected to have the sixth and final contract signed next week.
According to court documents, Davis has an agreement with Miami-based real estate firm, New Valley, the 50 percent owner of the property’s broker, Prudential Douglas Elliman, to refinance the condo building.
“A condition of the refinance with New Valley is the simultaneous closing of at least one unit at the property other than the suite apartment,” Davis’ attorney Scott Markowitz wrote in court filings.
Davis filed Chapter 11 bankruptcy in December after Zimco Holdings, which acquired a $6 million loan on the property, planned to hold a foreclosure auction.
Davis was facing not only a foreclosure on the luxury Park Avenue condominium building at 87th Street, but was going through a bitter two-year divorce proceeding with his wife Diane; a foreclosure lawsuit at his family’s apartment at the Empire Condominium; and a lawsuit for back rent at his 860 Lexington Avenue office.
In court documents filed April 19, Davis said that Wrightwood Capital, the senior construction lender at 1055 Park, sold their loan to an entity called 1055 Park, which is controlled by Andreas Badian and that Zimco had the junior mortgage loan. In total, the senior lender was owed $17.6 million, Zimco was owed $6.5 million and another $1.3 million was required to complete the project.
In the filing, Davis’ attorneys proposed a refinancing deal that would allow Davis to pay off the Park 1055 loan, buy the Zimco loan for $3 million and satisfy all additional project costs. Davis would then issue a new $2 million note to Zimco.
Lawyers for Davis said in court filings that if all the units closed May 27, as scheduled, that would reduce the interest paid to New Valley under the refinancing.
According to court documents, Bank of America and the developer’s estranged wife, Diane Davis, have filed objections to the refinancing, claiming that the 30 percent interest rate is excessive and that Davis’ unsecured creditors will be prejudiced by some aspects of the refinancing motion.
A May 24 hearing is scheduled on the refinancing of the property, court records show.
Davis declined to comment. William Goldman, lawyers for the senior lender, said he had not reviewed the documents yet. Officials at New Valley and Elliman were not immediately available for comment and nor were attorneys for Diane Davis.