The Real Deal New York

Ex-United exec sues firm after botched 866 UN Plaza buy

December 20, 2013 11:21AM

UPDATED, 12:12 p.m., Dec. 22: The former president of United Realty Partners is suing the firm and its CEO over an allegedly improper fund transfer that resulted in United being disqualified as a prospective buyer of 866 United Nations Plaza. On Tuesday, Meadow Partners closed on the $200 million acquisition of the office tower, between First and York avenues, from Vornado Realty Trust.

United was contemplating partnering with Meadow on the buy, as The Real Deal reported yesterday. Meadow and United entered contract last month. But United’s investor group failed to raise enough money and Meadow purchased the 360,000-square-foot asset alone.

Now Eli Verschleiser, formerly of United, alleged in New York State Court that United and its CEO Jacob Frydman improperly transferred $6.9 million of investors’ funds after Verschleiser resigned. Frydman still controls the funds, the suit says, despite the fact that they were not deployed in the failed bid to purchase 866 U.N. Plaza.

“All investor money was returned immediately, and before the lawsuit was ever filed,” Frydman said in a statement provided to The Real Deal. “In fact, in denying the temporary restraining order that Mr. Verschleiser requested, the court stated that he had not shown any likelihood of success in the case.”

Vornado netted about $146 million from the sale after repaying current debt and various closing costs, Law360 reported.

Meadow also recently acquired a 130-unit rental building at 110 Green Street in Greenpoint for $72 million. [Law360]Mark Maurer