Castellan sues ex-exec for allegedly buying property for himself

Judge issues restraining order blocking sale of 97 Second Avenue

New York /
Feb.February 28, 2014 03:48 PM

Castellan Holdings, a Manhattan-based real estate investment firm, is set to square off against a former executive on March 6 in Manhattan Supreme Court – this, after a judge issued a temporary restraining order to block a deal the exec negotiated to buy an East Village walk-up building for himself.

Judge Donna Mills issued a restraining order that blocks the sale of 97 Second Avenue until she determines whether the property must be sold to Castellan.

Castellan, led by managing principal Paul Salib, claims in its Feb. 26 lawsuit that Paulius Skema, its former vice president of operations, negotiated a deal to buy the building at 97 Second Avenue for a firm that he personally controls. Salib alleges Skema began to put the deal together while he was still an employee of Castellan.

Skema, who worked with Castellan from 2011 until this month, found out that the building, owned by a Bayside, N.Y.-based firm called 97 Second Avenue Building Corp., was being marketed through a Long Island-based broker named Raphael Toledano, according to the complaint. The filing alleges he then proceeded to enter negotiations to buy the property.

“Upon information and belief, Skema determined that the premises was a prime real estate investment property for resale at a profit and, instead of negotiating to purchase the premises on behalf of Castellan, Skema decided to acquire the premises for his own interest and account through an entity that he controlled,” Salib said in a sworn affidavit dated Feb. 25.

Toledano, a broker at Weissman Realty Group, in Lawrence, N.Y., was not immediately available. Toledano was named as a defendant in the suit, but the brokerage was not mentioned. Adam Leitman Bailey, whose firm is representing Castellan, declined to comment. Attorney Lynn Okin, who represents the landlord on behalf of Okin Edelman, did not return calls.

According to PropertyShark, the six story building, owned by an investor named Douglas Pratt, has 10 residential apartments and a 2,600 square foot retail space that currently houses a laundromat. Pratt did not return calls.

Castellan, which opened in 2008, claims it has closed 39 transactions worth about $160 million since then. As previously reported, Castellan reached an agreement with New York State regulators amid claims that it demanded to see the passports and proof of citizenship of Spanish speaking tenants at its buildings, and evicted those who did not comply.

The firm owns 49 buildings in Brooklyn, Washington Heights, Harlem and the South Bronx.


Related Articles

arrow_forward_ios
 Adam Leitman Bailey with 6 Turtle Knoll in Monroe (Adam Leitman Bailey Law Firm, Trulia)
NY foreclosure ban does not apply to shell companies, judge rules
NY foreclosure ban does not apply to shell companies, judge rules
A condo building couldn’t collapse in NYC. Or could it?
A condo building couldn’t collapse in NYC. Or could it?
A condo building couldn’t collapse in NYC. Or could it?
Project Renewal CEO Eric Rosenbaum, Attorney Adam Leitman Bailey and 27 West 11th Street. (Google Maps, Facebook via Project Renewal, Bailey)
Greenwich Village site eyed for shelter has asbestos issues: lawsuit
Greenwich Village site eyed for shelter has asbestos issues: lawsuit
Fortis CEO Jonathan Landau and Bayard Views Condominium at 20 Bayard Street in Williamsburg (Fortis; Google Maps)
Court lets Fortis off hook for Williamsburg condo defects
Court lets Fortis off hook for Williamsburg condo defects
From left: Jim Whelan, David Schechtman, Tom Elghanayan, Helena Durst, Bill Rudin, and Adam Leitman Bailey
Real estate bigwigs sound off on politics at REBNY gala
Real estate bigwigs sound off on politics at REBNY gala
Adam Leitman Bailey suspended from practicing law for 4 months
Adam Leitman Bailey suspended from practicing law for 4 months
Adam Leitman Bailey suspended from practicing law for 4 months
There’s more trouble ahead for Chinese developer of Oosten condo
There’s more trouble ahead for Chinese developer of Oosten condo
There’s more trouble ahead for Chinese developer of Oosten condo
Herb Hirsch, Michael Burak and 145 East 39th Street
Brokers win $1.2M in six-year-long commission battle
Brokers win $1.2M in six-year-long commission battle
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...