The Real Deal New York

Court tells Harry Macklowe to pay former partner $30M

Appellate division rejects developer's claims in breach-of-contract battle
December 24, 2014 01:28PM

An appellate panel has affirmed a Supreme Court justice’s granting of a summary judgment against Harry Macklowe after a long-running legal battle between the developer and former partner Warren Cole.

The Appellate Division in the First Department also affirmed a $30 million judgment entered by Supreme Court Justice Cynthia Kern against Macklowe himself. Cole worked for Macklowe from 1988 to 1999.

The panel found that Cole retained his 9 percent interest in the partnership because Macklowe did not close on his purchase of the stake, according to the New York Law Journal. Cole claimed that his obligation to sell the stake in 1999 was conditioned upon Macklowe’s setting the purchase price, which Macklowe never did.

“While the [partnership agreement] does not clearly spell out all the mechanics of executing the buy-sell provision, it is implicit that the initial step was Macklowe’s valuation of the partnership interest,” Justice Rolando Acosta wrote in an opinion Tuesday.

The panel rejected Macklowe’s claim that his former partner’s allegations were barred by doctrines of waiver and estoppel in earlier court rulings, according to the paper.

“Cole’s inaction does not raise any issues of fact with respect to defendants’ affirmative defenses because the [limited partnership agreement] imposed no affirmative duty on Cole, even after his employment terminated, to take action to maintain his partnership interest,” according to Acosta. [New York Law Journal]Mark Maurer