Developers sue Anglo Irish Bank for $1B

January 04, 2011 09:00AM

Developer Simon Elias and Flatotel

Developers Simon Elias and Izak Senbahar of the Alexico Group are suing Anglo Irish Bank for $1 billion in a funding dispute over $500 million of loans that the bank gave to the men and their companies to redevelop three Manhattan hotels, the Mark, the Alex and the Flatotel, the Irish Times reported. The bank would not comment, but sources said it intends to defend the lawsuit and that the developers’ case has no merit. According to court documents, close to $270 million of the $500 million total relates to the Mark Hotel on the Upper East Side, and Anglo has reportedly been trying to sell on this debt for as little as $200 million. In July, Anglo sold the debts relating to the Alex and the Flatotel to a group of companies known as RPAP. Elias and Senbahar allege that this was a breach of their agreements with Anglo, since RPAP’s backers are the Procaccianti group, a hotel management firm, Atlas Securities and Rock Point, competitors of the plaintiffs. They claim the Irish bank secretly entered talks with these companies earlier this year to sell the loans to them. The RPAP companies are now seeking repayment of the debts due on the Alex and Flatotel, and are threatening the owners with foreclosure. [Irish Times]