The Real Deal New York

Ex-Domino Sugar owner fights $185M Two Trees sale on appeal

September 19, 2013 03:53PM

Domino-Sugar2

Domino Sugar Factory in Williamsburg

Developer Katan Group continues to fight to upend a series of court decisions that enabled the $185 million sale of the Domino Sugar factory site in Williamsburg to Two Trees Management.

The trial judge who allowed the sale to proceed erred throughout the litigation, an attorney for Katan told a four-judge appeals court panel.

The complex dispute spans four lawsuits, three of which are on appeal and one of which is still pending before Judge Eileen Bransten. Two of the suits dealt with a proposed $125 million refinancing of the project — which was initially a joint venture between Katan and Community Preservation Corporation — and the remaining two center on the Two Trees deal.

At the hearing, Katan’s attorney focused on what he said was Judge Bransten’s flawed ruling ordering Katan to pay CPC’s attorneys’ fees.

The original plan was for CPC and Katan to build a $2.2 billion residential housing project through their partnership, Refinery Management. But the deal stalled in early 2012 and the partners began to butt heads as the joint venture looked for a buyer. Katan filed its first action in March 2012 to stop the refinancing, which it argued gave its interest away to another firm.

A court later held that CPC was entitled to complete the refinancing, dismissing Katan’s claims that it had a right of first refusal that allowed it to purchase another member’s interest in the joint venture entity but not the property itself.

Katan returned to court after CPC announced its $185 million agreement with Two Trees, but Judge Bransten, finding Katan’s underlying claim to be the same as in previous cases, dismissed the suit. [Law360] Julie Strickland

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