Jacob Chetrit sues partner for $50M at Beekman hotel conversion

By David Jones | August 20, 2010 09:30AM

5 Beekman Street

Developer Jacob Chetrit filed a $50 million lawsuit against Bonjour Capital’s Charles Dayan, alleging the investment partner reneged on a deal to pay off a defaulted construction loan after the lender filed to Foreclose On Their Beekman Street hotel project in Lower Manhattan.

In a suit filed Aug. 12 in New York State Supreme Court, Chetrit alleged that Dayan agreed to pay his share of a reduced settlement in the foreclosure case at 5 Beekman Street, where the two investors planned to convert a landmark office building into a 200-room luxury hotel.

The investors bought the 10-story office tower at Nassau Street, originally built in 1883, from Ruby Schron of Cammeby’s International for $61 million in April 2008.

The lender, San Francisco-based Pacific National Bank, filed suit in August 2009, alleging that Chetrit and Dayan defaulted on a $45.75 million loan.

Under a settlement deal signed last month, U.S. Bank, which later acquired the assets from Pacific National, agreed to accept a $21 million payoff if made within 90 days, or $22 million if made within 180 days, forgiving the remaining balance.

Chetrit, in his lawsuit, claims that he and Dayan each agreed to pay $4.25 million by October 2010. Chetrit claims he fronted Dayan’s share of the money to U.S. Bank.

“These guys were negotiating for like six months or a year [with the lender],” Chetrit’s attorney Stephen Meister told The Real Deal. “Then Dayan said, ‘I’m not paying it.'”

Meister says that Chetrit could be held responsible for the entire balance if Dayan fails to pay his share of the loan.

Dayan did not return repeated calls for comment. Jay Lefkowitz, who represents Dayan in the Chetrit suit, was not immediately available for comment. Stephen Ellman, the attorney representing the lender, wasn’t immediately available for comment.

Meister also filed a motion Aug. 12 to appoint a temporary receiver for the property. Lefkowitz, in a letter sent yesterday to Judge Shirley Kornreich, requested additional time to answer the motion by Aug. 25.