A Manhattan Supreme Court judge rejected a bid by the Wasserman real estate family to enforce the closing of a Midtown rental building that was under contract with Melohn Properties for $132 million.
Justice Arthur Engoron, in a decision released Friday, said he could not issue a preliminary injunction to enforce the sale of The Camelot, a 17-story rental building at 301 West 45th Street. In the ruling, Judge Engoron noted that while buyers do have the right to specific performance of the contract, the Wasserman group failed to demonstrate any irreparable harm or cite prior case law.
“Even assuming, arguendo, that seller acted in bad faith in rejecting the Nov. 19, 2014, closing date, such circumstances are not so extraordinary as to warrant this court to set a closing date for ‘on or before Dec. 17, 2014,’ which would constitute the ultimate relief sought in this complaint,” the judge wrote.
Attorney Stephen Meister, who is not affiliated with either party, says the court agreed with the buyers that they are entitled to purchase the property, but said there is no precedent in law to enforce a closing date on the front end.
“The court is basically agreeing that the buyers are entitled to specific performance,” Meister told The Real Deal, “but that order comes at the end of the case, not the beginning.”
S.W. Management Acquisitions, led by Alan Wasserman, filed the lawsuit on Nov. 14, alleging the firm entered contract to buy the properties in July, with a closing originally scheduled for Oct. 29. The suit alleges that Melohn asked for a 2015 closing for tax purposes, but when that was rejected the firm requested a Dec. 23 closing in exchange for certain concessions. The plaintiffs’ termed the concessions a “shakedown.”
Attorney Y. David Scharf, representing the sellers, said such an injunction would have been “unprecedented” in New York and noted there were specific remedies in the contract that included S.W. Management getting a refund of its deposit.
“We obviously had a buyer that wanted to close by a reasonable time,” said Scharf. “We are still hoping to have that happen by a reasonable time.”
The property, originally built in 1966, has 176 units, with studios starting at $2,350 a month.
Attorney Michael Haskel, who represented the plaintiffs, said his clients disagreed with the ruling but respect the decision. He said the final closing date on the deal has not yet been determined, but S.W. Management still intends to forge ahead with its case.
“We’re not going to be boxed out,” said Haskel. “A significant part of [the judge’s] reasoning I think was on target. We thought [he] had more power than he thinks he has.”