The Real Deal New York

Gluck, Benishai in battle over Upper West Side buildings

Stellar Management boss looks to derail David Benishai’s sale of 250-252 West 76th Street
By David Jones | June 04, 2014 03:18PM

Lawyers for Laurence Gluck are scheduled for a June 27 court hearing to try to block real estate investor David Benishai from selling his stake in an Upper West Side residential complex to rival firm Argent Ventures.

Gluck, who last year bought a 49.9 percent stake in a 69-unit residential complex at 250-252 West 76th Street from investor Jack Benishai, filed suit on Monday to block Benishai’s brother David from completing a deal to sell his stake to Argent, a Manhattan-based investment firm founded by Andrew Penson.

Gluck, the founder of Stellar Management, also claims that David Benishai defaulted on a $6 million loan that he borrowed from Ilan Properties, the company that controls the buildings.

Gluck, in court documents, claimed the two brothers borrowed the money from Ilan under a five-year loan that was due on March 31st. Gluck claimed that the structure of the loan was not declared as taxable income by David and therefore ‘highly controversial’ if not a possible legal violation, according to court papers.

“David does not and cannot speak for Ilan in any aspect of the transaction, and has a conflict of interest, and is a debtor of Ilan, in default on the settlement agreement,” Gluck said in an affidavit. “Further due to his breach of fiduciary obligations, bad faith and self dealing, David should not be allowed to enter into a material transaction which alters the structure of Ilan.”

The complex includes a four-story rental building at 250 West 76th and an 11-story rental at 252 West 76th Street.

Attorney Claude Castro, who represents David Benishai, confirmed that an agreement is on the table to sell the stake, but claims that Gluck’s lawyers misinterpreted the loan agreement. He says that the Benishai brothers each borrowed about $1.1 million each from Ilan and said those notes are not due until 2019, adding that there was a deal to refinance the property’s mortgage.

Castro also said the judge rejected the emergency request for a restraining order, but set a date for both sides to submit legal arguments.

“In my opinion I think the claim is really baseless,” Castro told The Real Deal. “I’m pretty sure it will be denied on the return date.”

Lawyers for Gluck were not immediately available, nor were officials at Argent. Attorney Ari Weiss, representing Jack Benishai, said he could not immediately comment.

As The Real Deal previously reported, the Naftali Group sued Jack Benishai in 2013, claiming he reneged on a deal to sell the properties to them for $25 million.