The Real Deal New York

Suzuki faces lawsuit at Midtown condo Number 5

June 06, 2012 09:00AM
By David Jones

Sam Suzuki and Number 5 condo

Real estate mogul Sam Suzuki is facing a $3 million lawsuit from the condominium board at his Number 5 development in Midtown, with the board alleging that he committed fraud and negligence in the marketing and sale of apartments at the building.

The suit against Suzuki, principal of Suzuki Capital, was filed last week in New York State Supreme Court in Manhattan. The residential firm Core, previously the broker at Number 5, was named as a defendant, for alleged fraud in the marketing and sale of condo units at the 20-story building, located at 5 East 44th Street.

The summons does not specify in detail what the complaints were; lawyers allege there were a number of promises made to fix construction issues at the building that were not fulfilled.

“We hope that we can amicably resolve all issues concerning construction of the building,” said attorney Steve Sladkus, head of the real estate practice at Wolf Haldenstein Adler Freeman & Herz.

The lawsuit alleges that Suzuki, along with co-developer Patrick Thompson, also wrongfully transferred equity distributions of the sponsor’s assets thus leaving the sponsor insolvent, or with “unreasonably small capital.”

A group of contractors, starting with Philip Johnson/Alan Ritchie Architects, were also named as defendants for alleged negligence, fraud and professional malpractice in connection with architectural and engineering services at the building.

Suzuki first acquired the original six-story office building in 2006, later demolishing it and converting it into condos.

The suit marks the latest piece of litigation involving the building.

Douglas Elliman and Core Group previously filed suit against the sponsor group for allegedly failing to pay commissions on individual unit sales. In March, a state Supreme Court judge granted an $87,871 judgment in favor of Douglas Elliman.

According to Streeteasy.com, the property has 23 previously recorded sales averaging $1,067 per square foot.

In 2006, BRT Realty Trust filed suit against Suzuki and 44th Street Partners, alleging the sponsor defaulted on $1.2 million in mortgage principal after failing to make payments starting in May 2006.

Suzuki, who left Vintage Group in 2008 to form Hunter Property Management, has faced years of criticism for his handling of properties in the Bronx and other areas. He was forced to spend a month in jail at the Manhattan Detention Complex in 2010 after failing to make repairs demanded by a Bronx Housing court judge.

Neither Suzuki nor Thompson were immediately available for comment. Attorney Alice Belmonte, who represented Suzuki in the original Core Group suit, declined comment. Attorneys at Starr Associates, the firm that handled the Number 5 offering plan, were not immediately available.

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