FiDi Setai investor seeks to block deed transfer in $150M note sale

By Adam Pincus | January 04, 2011 06:21PM

Zamir principal Asher Zamir and the Setai Wall Street lobby

An investor in The Troubled Setai Wall Street condominium project in the Financial District filed a lawsuit against the developer and its lenders, including Anglo Irish Bank, to try and block the transfer of the deed which is being offered as part of a sale of the defaulted $150 million note.

Manhattan-based real estate firm Delshah Group filed suit in New York State Supreme Court, seeking a court order to block the transfer of a deed-in-lieu of foreclosure for Zamir Equities’ Setai Wall Street, at 40 Broad Street. The deed transfer would follow the sale of the defaulted note. The note has not yet sold, court records indicate.

Delshah filed the lawsuit Dec. 20, its third lawsuit at the property, claiming it is the largest member of the entity that controls the deed and does not consent to a deed-in-lieu. Delshah asserts in A Letter Filed With The Court that Asher Zamir, principal of Zamir Equities, agreed to a deed-in-lieu only in exchange for removing his personal financial guarantee.

Zamir Equities acquired the 34-story office property in 2005, and led the conversion that ran into cost overruns and construction delays. In 2007, Delshah paid $4.2 million for an ownership interest in the property.

In early July 2009, because of the building hold-ups, Attorney General Andrew Cuomo allowed rescission of 91 contracts totaling $110 million. In September of that year, the loans were restructured. As part of that arrangement, Anglo Irish claims in court papers filed in response to Delshah’s latest lawsuit, that a deed-in-lieu was prepared in case of another default, permitting an easier sale of the property, court records show.

Sales continued and the building is now 50 percent sold, the Wall Street Journal reported last month.

In November, Anglo Irish Bank was said to be selling the note through Holliday Fenoglio Fowler as part of an effort by the Irish bank to unload its American portfolio.

Delshah was a bidder on the note, but did not win, Anglo Irish papers contend.

Delshah “is a disgruntled third-tied equity investor… in the failed 40 Broad Street rehabilitation project who is also a disgruntled bidder who sought to purchase (and now seeks to interfere with) Anglo’s $150 million defaulted loan,” the Irish bank said in Its Court papers.

Representatives from Zamir Equities and Anglo Irish did not respond to requests for comment. Broker Whitney Wilcox, a senior managing director at Holliday Fenoglio Fowler, said he could not comment on properties the firm is marketing.

Delshah’s previous lawsuit in state court filed in October 2009 was rejected by a lower court judge but the company filed an appeal which is pending. A case filed in federal court in Manhattan in August 2009 is also ongoing.

Anglo Irish Bank is facing another recent lawsuit. Developers Isak Senbahar and Simon Elias of the Alexico Group are seeking $1 billion in a dispute over $500 million in loans from Anglo Irish.