Judge to hear investor’s bid to halt 587 Fifth sale to Crown

Zamir Equities is facing a challenge to $27.5 million deal
By David Jones | June 18, 2013 02:00PM

A New York state judge is scheduled to hear arguments from an investor in 587 Fifth Avenue — a 10-story office and retail building on a prime stretch of the shopping strip — who is trying to block developer Asher Zamir from selling the property’s leasehold to Crown Acquisitions.

Elyass “Elliott” Eshaghian, president of Manhattan-based Evvan Importers, filed a derivative suit June 12 in New York State Supreme Court on behalf of investors in the property, alleging that Zamir made decisions about its future without his permission. Zamir, the principal of the investment firm Zamir Equities, owns 66 percent of Baruch LLC, the entity that controls the leasehold.

Judge Charles Ramos rejected Eshaghian’s bid for a temporary restraining order, but ordered a hearing on June 24, where he will consider the investor’s request to block the sale and allow him to review the books at the property, according to court documents.

Zamir entered a deal in March 2012 to sell the leasehold for $27.5 million to a partnership that included Crown, headed by Stanley Chera, and Steven Feldman of One North Realty, court records show. This past March, after negotiations for the deal stalled, Crown and One North filed suit to enforce the sale of the leasehold, as The Real Deal reported.

Eshaghian claimed that Zamir wanted to refinance an $18 million mortgage at 587 Fifth, which expires on July 31, without his consent, and refused to hand over information about the transactions.

“Asher has refused to provide any information at all,” the complaint said. “Elliott has no choice but to conclude that Asher is concealing activity that is prohibited.”

Specifically, Zamir hid the fact that the company had to pay almost $1 million to Quiksilver, a sport apparel store that occupied the ground floor retail space, to terminate its lease early, Eshaghian alleged.

Zamir denied the allegations that the developer is violating the operating agreement and questioned Eshaghian’s motivations.

“We are confident that Mr. Eshaghian’s most recent salvo will amount to nothing — his allegations are baseless and he is clearly quite desperate,” said attorney Jay Russ, part of the legal team representing Zamir. “Mr. Zamir has worked diligently at managing 587 Fifth Avenue, so as to maximize its value. Mr. Eshaghian is proving the old adage that no good deed goes unpunished.”

Lawyers for Eshaghian did not return calls. Eshaghian was not available for comment.