Cipriani fights judgment in $2M loan dispute

By David Jones | March 01, 2011 05:54PM

From left: Giuseppe Cipriani, Harry Cipriani at 781 Fifth Avenue and Cipriani Downtown at 376 West Broadway

Giuseppe Cipriani, the head of the famed Manhattan-based restaurant, condominium and banquet hall chain, is facing a possible judgment after defaulting last year on a $2 million loan designed to help finance his company operations.

Cipriani — who not long ago almost lost a number of restaurants at auction — failed to repay the loan when it came due in May 2010, and the loan was then sold to Rouvel Holdings, which entered a deal with Cipriani to repay the note under a restructuring plan, according to a Feb. 22 lawsuit. Cipriani paid a $100,000 down payment, but the two parties failed to reach agreement on a plan, and the loan was sold to Landover Marketing.

“He didn’t live up to his terms of the note,” said attorney Larry Kutcher, who represents Landover Marketing.

Cipriani thus far has paid $300,000 towards the loan repayment, and has a total balance of $1.97 million, including interest, penalties and other fees.

Lawyers for Cipriani counter that the suit should be considered defective because there is no indication how interest and previous payments are calculated; the Moscow-based collection agency, called Rusinvest, never authenticated the debt and Cipriani’s name is misspelled by the collection agency.

“I think we’re saying in there that they didn’t give us the requisite notice,” said attorney Stephen Meister, who represents Cipriani. “We’re trying to resolve the matter.”

The suit marks the latest financial crisis for Cipriani, who nearly lost several New York restaurants — including Harry Cipriani at 781 Fifth Avenue and Cipriani Downtown at 376 West Broadway — to the auction block in late 2010. The lender, Capital One Bank, had sued the company for over $4 million in outstanding debt, but a last-minute agreement prevented the restaurant fixtures from being auctioned.

Cipriani has spent much of the last year in Europe and the Middle East, overseeing an expansion of the company.

A spokesperson for Cipriani was not available for comment.