Bruce Eichner, chairman of Continuum Companies, said he hopes to submit a new plan to rescue the embattled One Madison Park condominium project, as he awaits a tentative, rival agreement to sell the property to HFZ Capital Group, led by managing principal Ziel Feldman.
The move comes just weeks after One Madison developer Ira Shapiro settled with billionaire investor Cevdet Caner, who previously filed suit alleging Shapiro had exceeded his decision-making authority at the 23 East 22nd Street tower.
“It is highly likely we will actively pursue a competing plan for the benefit of the creditors,” Eichner said. When asked about the sum he would submit, he said there are “lots of moving pieces.”
Shapiro and Caner tentatively agreed to sell the property to HFZ, but no deal has been formally presented to the U.S. bankruptcy court in Delaware, where a judge is trying to sort out millions of dollars in claims against Shapiro‘s firm Slazer Enterprises.
Shapiro and Caner have until the end of March to bring a plan to the court and then at that point, Eichner may submit a new plan.
“We have a fiduciary duty to look at that plan,” Shapiro said.
A source familiar with the deal says that Eichner is fighting tooth and nail to emerge victorious in this battle, because he sees a great deal of upside at One Madison Park, even if it takes several years to realize any profits.
“Bruce is trying to do everything he can to keep in the game,” the source said. “He might be successful if he writes the right check.”
In November, Eichner entered a deal with Shapiro to invest $40 million in One Madison Park and rescue the property from bankruptcy proceedings, after it was placed in involuntary bankruptcy by three creditors who were owed $12 million. Those investors filed to put the project into bankruptcy, because they were unlikely to get repaid in New York State Supreme Court, where iStar Financial was fighting to foreclose on the property. Shapiro’s firm owed more than $200 million in unpaid mortgage loans, personal loans, contractor fees and other debts.
Green Bridge acquired voting rights from One Madison partner Marc Jacobs and fought the Eichner deal in court arguing that Shapiro was required to get its consent before signing off on major decisions.
Ultimately the winner is expected to be the investor who can best satisfy the millions of dollars in debt owed to the creditors committee, which consists of a wide range of unit buyers, lenders and contractors.
HFZ has exclusivity to present a plan for six weeks, Eichner told The Real Deal last Friday.
After the plan is submitted, Eichner said he plans to step forward with his competing bid.
He said he “intends to pursue the matter, including the presentation of a competing reorganization plan in bankruptcy court, if it becomes an option.”
But, sources said if the judge approves the HFZ plan, then Eichner may not get a chance to submit an alternate plan.
“The judge has to decide whether the proposed plan is feasible,” said a source familiar with the case. “If the judge likes the plan, then Eichner’s done.”
Lawyers for iStar and Green Bridge were not immediately available for comment.