Cooper Square sues ex-landlord over credit line

Emigrant Savings Bank affiliate tried to seize funds from firm, suit says

New York /
Sep.September 25, 2012 02:30 PM

Cooper Square Realty Inc. has filed suit against its former landlord, at 6 East 43rd Street, claiming that the affiliate of Emigrant Savings bank has attempted to draw down its letter of credit amid claims that it left its former headquarters in less-than-pristine condition.

The biggest residential building manager in New York, Cooper Square is seeking an injunction to prevent the landlord from another attempt at drawing down its credit line, which was used in place of cash for the security deposit.

The lawsuit stems from Cooper Square’s Dec. 30, 2011 move to larger, 66,000-square-foot space at 622 Third Avenue.  The company paid its former landlord an early termination fee of $151,800.  The following month, the landlord then submitted a demand for Cooper Square to pay another $220,000 for “unspecified repairs” and later hiked that demand to $500,000 without providing a detailed breakdown of the damage at the old offices.

According to the lawsuit, filed September 19 in New York State Supreme Court. Cooper Square said the landlord threatened to draw down from a $414,000 letter of credit it has with Toronto-Dominion Bank — and then attempted to do so.

However, Cooper Square officials denied leaving the former office space damaged, saying they left the space in “broom clean” condition. “We believe we had been good tenants during the entire term of the lease,” Ben Kirschenbaum, vice president and general counsel at Cooper Square, told The Real Deal. “We moved out and believed that the landlord’s demand is totally unreasonable as to the scope of the work that was done.”

Daniel Hickey, a senior vice president and general counsel at Emigrant, declined comment citing the ongoing litigation.

A court hearing is scheduled for Nov. 2 at 60 Centre Street.

In July, Crain’s reported that real estate mogul Howard Millstein would sell all but two of the Emigrant Savings Bank branches to Apple Bank for Savings.

Cooper Square was recently named as a defendant in a suit by James Sheehan, the former project manager at 515 East 72nd Street, the condominium formerly known as Miraval Living. Sheehan, in the suit filed in New York State Supreme Court, alleged that Square Mile Capital, the lender that took control of the project, failed to pay him more than $400,000 in compensation when he was terminated. Cooper Square managed operations at Miraval, and Sheehan was positioned as an employee of the firm, under his contract. Cooper Square officials previously declined to comment on that case.

 

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