Melohn may see injunction over $132M sale of Midtown rental

Wasserman family accuses seller of “shake-down”; asks court to set mid-December closing date

TRD New York /
Nov.November 18, 2014 12:13 PM

UPDATED, 3:55 p.m., Nov. 18: Melohn Properties is set to face off on Wednesday with lawyers for the Wasserman real estate family amid claims that the firm has repeatedly tried to delay closing a $132 million deal to sell the Camelot, a rental building located just a few blocks west of Times Square.

In a lawsuit filed November 14, the Wassermans’ S.W. Management Acquisitions is asking a Manhattan Supreme Court judge to issue an injunction that would set a final closing date by mid-December for the 17-story property, located at 301 West 45th Street.

The Wassermans claim that two days before a scheduled Oct. 29 closing, lawyers for the Melohns asked for a delay of the closing until January for tax purposes, according to court papers. Lawyers for the Wassermans claim that, after additional discussion, attorneys for Melohn proposed a Dec. 23 closing in exchange for certain concessions that they characterized as a “shake down.”

Analysts said the building is likely the subject of a 1031 exchange, which allows an investor to defer capital gains taxes if the proceeds from the sale of one property, which has been owned for at least a year, are used to buy another similar property within 180 days.

The Wassermans have been ready to close since Oct. 29, they claim in court papers, and wrote back to the sellers saying that failure to close by Nov. 19 would be considered a default of the contract.

Court documents released Tuesday, however, seek an injunction that would force the sellers to close the deal no later than Dec. 17. The Wassermans argue that a delay of the closing into 2015 would have tax consequences and create other difficulties.

“Essentially the motion is now returnable by Wednesday,” the Wassermans’ attorney Michael Haskel told The Real Deal. “We just want to close.”

The building has 176 apartments, with studios starting at $2,350 a month. The property has an alternate address of 717 Eighth Avenue, according to The Melohn family has owned the building since 1978.

Melohn’s lawyer Y. David Scharf disputed the allegations in the complaint. “It’s unfortunate that the buyer has decided to try to use the court system to strong arm a closing date that it did not negotiate for in the contract,” he said.

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