Macklowe to pay former exec more than $3M

Mar.March 04, 2009 06:20 PM

Developer Harry Macklowe must pay his former top deputy $3.4 million plus interest from the sale of three buildings in the 1990s, a Manhattan judge ruled last week.

That decision in a decade-old case brought by Warren Cole, former president of Macklowe Properties, is not much of a triumph, however, because he sought millions more. Cole, who worked for Macklowe from 1988 to 1999, claimed in a lawsuit filed in 1999, months after he left the company, that his one-time boss owed him roughly $20 million for an alleged 10 percent interest in about 21 Macklowe properties. As part of the suit, Cole said a contract from 1998 laid out the $3.4 million he was owed as a bonus from the sale of the three buildings at 245 Seventh Avenue, 1412 Broadway and 3 East 54th Street, court records state.

But Supreme Court Justice Marylin Diamond rejected Cole’s claim that he had a 10 percent interest in Macklowe’s properties in her February 24 interim decision, awarding him only the $3.4 million plus interest and money for damages.

Macklowe already agreed that he owed the $3.4 million, but the latest decision is the first court order stating that he must pay.

Despite the judgment, experts say Cole may have trouble actually getting the money from Macklowe, who is under tremendous financial pressure from purchases made at the top of the market, and who is battling Deutsche Bank for control of the Drake Hotel site on Park Avenue at 56th Street.

Macklowe spokesman Steve Solomon declined to comment. Cole’s attorney did not respond to a request for comment.

Real estate litigator Terrence Oved, who is not involved in the case, said the ruling would be disappointing for Cole.

“Despite the award in favor of Cole, the court’s decision is in effect a victory for Macklowe in that it discusses and then rejects all of the legal arguments propounded by Cole for a significantly larger award,” he said.

Cole may also find it hard to get paid once the litigation is finalized, “particularly in this economic climate and particularly against a defendant that may have numerous prior judgments,” Oved said.

The next court date is set for March 10, the court records indicate.

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