The Real Deal New York

Real estate exec sues Davis’ 1055 Park

By David Jones | June 13, 2011 01:51PM

A Manhattan real estate executive filed a lawsuit against Trevor Davis’ 1055 Park Avenue condominium project, alleging the developer reneged on a critical $5 million deal to sell him a luxury apartment, just days after the executive vouched for Davis before a U.S. bankruptcy court judge.

In a complaint filed in Manhattan Supreme Court last Thursday, Drew Greenwald, president of Harlem-based Grid Properties, alleges breach of contract and asked the court to order Davis Development to proceed with the closing by tomorrow’s deadline.

Greenwald alleges that after luring him into signing a purchase agreement for the four-bedroom apartment, Greenwald’s lawyers vouched for the deal before Judge Shelley Chapman in Davis’ personal bankruptcy case, allowing the developer to complete sales at the project. 

Greenwald says that days later, Davis, who had filed for personal bankruptcy in December to prevent his lenders from foreclosing on the building, personally called him and told him he signed a deal with another buyer.

“Greenwald’s name and reputation were used to add credibility to Davis’ bankruptcy sale,” wrote attorney Lisa Solomon, who represents Greenwald in this case. Davis declined to comment.

As The Real Deal reported last month, lawyers for Davis urged the court to approve a plan for him to sell units at 1055 Park, saying he had five units under contract and was about to sign a sixth contract, which was a 3,226-square-foot duplex that was being negotiated with Greenwald.

In papers filed in the federal bankruptcy case, Davis’ lawyers said that the proceeds from the first five unit sales would be used to pay off the senior lender and satisfy mechanics liens from unpaid contractors. The sale of the sixth unit would go to pay off Zimco Capital, a firm that in December was about to foreclose on a $6 million second mortgage loan, before Davis filed for personal bankruptcy. 

Court papers in both the bankruptcy case and the new state lawsuit showed that the Zimco deal hinged on closing the sale of the apartment by June 14. Zimco wasn’t immediately available for comment.

According to the complaint by Greenwald, one of his lawyers made an appearance at a May 26 hearing at Davis’ bankruptcy case, telling the judge that Greenwald was ready to move forward with a deal to buy the apartment. Davis’ lawyers never mentioned the existence of another buyer at the hearing, according to court records.

It remains unclear as to what motive Davis had for pulling the contract with Greenwald, but there are questions being raised as to whether the developer negotiated the deal in good faith.

“We don’t know,” Solomon told The Real Deal. “That’s why we filed the lawsuit.”

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