The Real Deal New York

Solly Assa-linked group sanctioned over retaliatory lawsuit

Judge rules investors filed frivolous suit against another set of backers in two projects

July 29, 2014 02:00PM
By David Jones

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Salim

Salim “Solly” Assa and 511 Ninth Avenue

A Manhattan Supreme Court judge sanctioned an investment group linked to Salim “Solly” Assa after it filed what the court found to be a frivolous and retaliatory lawsuit against a family of investors who accused the real estate developer of misappropriating up to $3.5 million in funds.

Justice Shirley Kornreich, in a decision released July 24, ruled that investors Simon Masri and Solomon Masri, operating through the B Mex Corp. and Ninemex Corp. entities, filed a frivolous suit in January 2014 against David, Rafael and Adolfo Mizrahi in retaliation for their 2013 suit against Assa.

In her decision, Kornreich noted that Assa secretly paid the legal fees directly to the law firm that represented B Mex and Ninemex, and refused to withdraw the complaint when they were accused of filing the frivolous action in a motion to dismiss the case.

“The judge’s decision lifts a veil on how Mr. Assa manages his real estate companies and punishes investors who assert their rights,” said attorney Kevin O‘Brien, who represents the Mizrahis. “As our lawsuit will show, this is the tip of the iceberg.”

Lawyers for B Mex and Ninemex were not immediately available for comment.

The Mizrahis, operating through a series of six separate investment vehicles, originally filed suit in November 2013, alleging they had invested $8 million in two of Assa’s real estate projects, including a four-story commercial building at 940 Eighth Avenue and 511 Ninth Avenue, a stalled hotel and condo project called the Galerie515 Hotel & Condominium Residences.

The suit claimed that Assa failed to respond to repeated requests for financial information. By January 2014, Assa denied the allegations, and then filed a counterclaim, alleging that the lawsuit was a violation of the company’s operating agreement.

As The Real Deal previously reported, Anglo Irish Bank filed suit in 2011 alleging Assa defaulted on an $18.5 million loan at 940 Eighth Avenue, a 28,400 square foot commercial building. By June 2011 a temporary receiver was appointed for the property and JP Morgan Chase later took over as plaintiff, according to court documents.

The lawsuit by the Mizrahis is still active in Manhattan Supreme Court.

Assa was not immediately available for comment. Attorney Harlan Lazarus, who represents Assa in the original suit by the Mizrahi family, declined to comment.

Assa has been actively involved in acquisitions in recent months, buying two Midtown rental buildings from Ark Partners for a combined $60 million.

Assa also acquired two buildings formerly owned by Ben Zion Suky of Livorno Properties, including 334-336 West 46th Street, at auction, for $9.5 million.

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