Setai Wall St. board sues HFZ, Zamir Equities for $5M

Alleges construction defects at 40 Broad St. building
July 10, 2013 08:30AM

The Setai Wall Street board is suing Zamir Equities, its principals and Ziel Feldman’s HFZ Capital for $5 million for what it contends are construction defects at the luxury condominium, the New York Post reported.

The complaint, filed yesterday in New York State Supreme Court, alleges the building at 40 Broad Street has water penetration issues and is missing design elements, such as glass railings on terraces.

HFZ, which bought the project’s discounted mortgage from now-defunct Anglo Irish Bank, became the “de facto sponsor” of the project when it took over the completion of construction and repairs, negotiated with third parties and marketed the building’s 167 units on behalf of Zamir Equities, according to court papers. Thirteen units remain unsold.

“This is not a lawsuit we charged into,” the board’s attorney, Rob Braverman, told the newspaper. “We have been trying to settle for a long time. HFZ is a player in the industry, and we are hoping they will do the right thing.”

An attorney for HFZ said he has not yet seen the lawsuit and an HFZ spokesperson said the company does not comment on litigation.

In May, a judge threw out DelShah Capital’s securities fraud lawsuit against Zamir Equities over the building, which alleged that Zamir had misrepresented the project to investors. [NYP, 2nd item]Hiten Samtani