A court has temporarily stopped the contracted sale of the Domino Sugar Factory development site to Two Trees Management, Crain’s reported. The sale has been tangled in a legal web ever since the Katan Group, a partner of CPC Resources in the development of the site, sued to block CPC’s sale of the site because it felt its partner did not pursue the highest possible price. In June, Two Trees agreed to pay $180 million in the transaction.
But last week the state’s Supreme Court dismissed Katan’s lawsuit because the firm “did not have the right of first refusal” on the property. Katan appealed that decision, and yesterday the Supreme Court Appellate Division allowed for an emergency stay to prevent the sale from closing until Katan’s appeal is addressed.
“[The judge's] order made clear that it was not based on the merits of Katan’s application,” CPC said in a statement to Crain’s. “We anticipate that a full Appellate Division panel will rule against Katan’s injunction as they have done twice previously, and as the New York Supreme Court has done numerous times, allowing for the deal with Two Trees to proceed as planned.”
Katan and CPC purchased the property for $55 million in 2007 and planned to build 2,200 apartments, 30 percent of which were slated to be affordable. But CPC ran in to financial trouble during the crash because of speculative lending, and by March it had been sued by Katan for mismanaging the project. [Crain's] – Adam Fusfeld