Related wins $577,000 in ILSA case against Greek shipping magnate and wife

New York /
Apr.April 02, 2013 10:30 AM

Related Cos. won a major victory when a federal district judge ordered a Greek shipping tycoon to pay the developer’s $577,000 in legal fees stemming from his reneging on an agreement to buy an exclusive Upper East Side condominium.

U.S. District Court Judge P. Kevin Castel ruled Monday that Vasilis Bacolitsas and his wife, Sofia Nikolaudou, must pay Related for its legal expenses after a federal appeals court overturned their lawsuit to get out of a $3.4 million apartment deal at the Brompton, at 205 East 85th Street

The couple sued under the Interstate Land Sales Full Disclosure Act, a federal law that requires developers to disclose key information to buyers interested in new condo buildings of more than 99 units. In 2010, a lower court sided with the couple on a technicality — that Related failed to record the lot description of the individual tax lot in a form that was “acceptable for recording.” A tax lot is assigned for each apartment , and all sales, mortgages, liens and other transactions are recorded under that assigned lot and filed with the city.

Related successfully appealed the decision in December; the three-judge panel noted that New York condos are often pre-sold before the building is completed, and therefore the individual tax lots are not assigned by the city Department of Finance until after construction is completed.

Bacolitsas and his wife were seeking to get back their down payment of $510,000; now, the couple will not only forfeit the deposit but will have to Related’s legal fees. The total: nearly $1.1 million.

Attorney Mark Walfish, who represented Related in the ILSA case, said the ruling for legal costs is a significant victory for developers.

“We questioned in their zeal to bring these cases, counsel for these prospective plaintiffs fully inform clients of the risk,” Walfish asked. “The sponsor was put through the mill.”

Castel also refused to allow the couple’s attorney, the firm of Adam Leitman Bailey PC, to withdraw as counsel. Bailey’s firm claimed it had been terminated, but the judge noted noting that the couple tried to remove them only after realizing that settlement talks were going against their interests.

“In The Time Since The Court’s Jan. 31 order, no attorney has appeared for plaintiffs and it is unlikely that any would ever appear because plaintiffs claim to be in dire financial condition,” the judge wrote in his decision. “Plaintiffs are employing a strategy to attempt to thwart the case from coming to conclusion.”

Bailey did not return calls. Bacolitsas could not immediately be reached for comment.


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