Subcontractor sues Swig FiDi project

New York /
Oct.October 16, 2008 02:57 PM

Lehman Brothers’ bankruptcy has caused another headache for Swig Equities’ stalled condominium conversion project in the Financial District — a dearth of funds to pay contractors.

Nova Development Group, of New Brunswick, NJ, which provided asbestos abatement at 25 Broad Street and Exchange Place, filed a lawsuit in Manhattan State Supreme Court October 10, seeking $764,100 for work done between February and July this year, according to the complaint.

Earlier this month, Swig Equities said it had suspended sales at the project, citing Lehman Brothers’ bankruptcy. Lehman Brothers Holdings, which filed for bankruptcy protection September 15, was a major funder of the planned conversion of the office building to a 346-unit condo.

Nova Development Group filed the lawsuit seeking payment from Swig Equities’ 25 Broad LLC and the contractor who hired Nova for the project.

Swig Equities said in a statement that it expected more subcontractors and contractors to file mechanic’s liens against the building because Swig’s funding from Lehman Brothers has been halted, rendering the developer unable to pay the contractors.

“Due to the effect of the Lehman bankruptcy, the construction loan funds for 25 Broad are frozen and it is anticipated that liens may be filed while the Lehman bankruptcy is pending,” the company said through a spokesman. “As soon as 25 Broad’s operating accounts are unfrozen, the project expects that all outstanding invoices will be paid in the normal course of business.”

Ronald Steinvurzel, the attorney representing Nova, recognized that Lehman Brothers had suspended funding for 25 Broad Street, but said Nova wanted to file its legal action to make certain it would be paid down the line.

“The financing fell through, which is par for the course in today’s economy,” Steinvurzel said, adding, “We had given as much time as possible to the owners. But you have to file your lien to preserve your rights.”
 


Related Articles

arrow_forward_ios
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
 Fredrik Eklund and the property (Getty, Steve Frankel)
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Gordon Ramsey and his Lucky Cat restaurant (Lucky Cat)
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Photo Illustration of Paramount Group Chairman, CEO and President Albert Behler in a Manhattan Equinox (Paramount, Equinox, Getty)
Despite rent-deferral agreement, landlord claims Equinox still won’t pay
Despite rent-deferral agreement, landlord claims Equinox still won’t pay
45 South Grove St in East Orange (Rendering via Progress Capital)
Hero Construction lands $20M loan to build East Orange apartments
Hero Construction lands $20M loan to build East Orange apartments
One New York Plaza and 60 Broad Street (Brookfield, Google Maps)
Manhattan office rents hit 4-year low as availability remains at record-high
Manhattan office rents hit 4-year low as availability remains at record-high
The rise of e-commerce, fueled by the pandemic, has created unprecedented demand for cardboard-producing facilities. (iStock)
Cardboard demand could fuel an industrial real estate boom
Cardboard demand could fuel an industrial real estate boom
MSCI CEO Henry Fernandez and Real Capital Analytics founder Robert White (MSCI)
MSCI to acquire Real Capital Analytics for $950M
MSCI to acquire Real Capital Analytics for $950M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...