The Real Deal New York

Rector Square developer’s wife and daughter sued for contempt

Suit alleges that Yair Levy's kin failed to show up for deposition related to $11M judgment

December 24, 2012 03:00PM
By David Jones

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Yair Levy

The Dallas-based Lone Star Funds has filed suit against developer Yair Levy’s wife, Sosana, and his daughter Galit, alleging they failed to respond to subpoenas, after the mortgage lender Anglo Irish Bank was awarded an $11 million judgment against the developer. Lone Star, which acquired more than $5 billion in bad debt from Anglo Irish, is contending that Levy may have fraudulently transferred assets to his wife and daughter to avoid enforcement of the judgment.

According to the suit, Sosana Levy, a Manhattan resident, failed to appear at a June deposition at the law offices of Foster & Wokind, which represents Lone Star. She was subpoenaed a second time in August and failed to respond, the suit said. Galit Levy, who has worked as an industry broker with Douglas Elliman, was subpoenaed and failed to appear at a September 5 deposition and later at a rescheduled Sept. 11 deposition, according to court filings.

Yair Levy, the developer of Rector Square, a 304-unit condo at 225 Rector Place, lost control of Rector Square after Anglo Irish foreclosed on the property in 2009 and sold the debt to the Related Companies, which previously owned the building as a rental.

Levy was later banned from future condo and co-op sales by then state Attorney General Andrew Cuomo, after the developer was found to have taken money from the condo reserve fund for use on personal expenses. As part of that case, a $7.4 million judgment was issued against Levy, and he was ordered to pay back the stolen reserve funds and compensate the unit owners that were victimized in the case.

In 2011, Levy and two other partners sold a retail complex at 620 Sixth Avenue for $500 million, and was allowed to use part of those proceeds to pay back Rector Square for the funds that were taken from that property.

Peter Foster, a partner at Foster & Wolkind; Yair and Galit Levy; Brian Belowich, an attorney for the Rector Square unit owners, and lawyers for Yair Levy were not immediately available for comment.

A spokesman for the current New York State Attorney General Eric Schneiderman was out of the office and did not return calls.

  • http://www.facebook.com/charlotte.friedman.92 Charlotte Friedman

    No surprises about Yair Levy. none.

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