The Real Deal New York

Buyer of $147M Hamptons estate says seller lied about Corcoran’s involvement

Hedge fund billionaire Barry Rosenstein is also suing over unwanted publicity
By Tess Hofmann | February 19, 2015 02:45PM

Billionaire hedge-funder Barry Rosenstein, who holds the record for the country’s priciest home purchase with a $147 million East Hampton megamansion, is taking the sellers to court, alleging that they lied about the Corcoran Group’s involvement in the deal. Corcoran sued Rosenstein as a result of the deception, he alleges.

Corcoran sued Rosenstein and the sellers in July, claiming the sellers selected it as a broker on the transaction and then cut it out of the final deal, depriving it of an $8.8 million commission. Rosenstein was eventually dismissed from the suit, which is still pending against the sellers.

The oceanfront property features 18 acres of landscaped gardens and a mansion built within the last ten years and designed by the former owner, architect Andrew Gordon, who inherited the property from his partner, Christopher Browne of investment firm Tweedy, Browne Company. Both men have since passed away.

In Rosenstein’s complaint filed Tuesday in Manhattan Supreme Court, he sides with Corcoran and alleges that the sellers, a group of estates representing 60 Further Lane’s deceased owners, pulled the wool over his eyes and misrepresented that they had not dealt with any brokers, despite having previously directed some of his inquiries to Corcoran broker Tim Davis.

These alleged misrepresentations led to Rosenstein being sued and having to foot a legal bill of $250,000 before he was dismissed from Corcoran’s suit, according to the complaint, which also states that there was a provision in the sale contract that specifically guaranteed the parties would pay each other’s legal fees if there turned out to be litigation from brokers claiming to be involved on either side.

“Rosenstein knew that the size of the transaction would be a magnet for litigation by brokers who believed they had any basis to demand a commission. Therefore, he bargained for a broad indemnity guarantee in the purchase agreements,” the complaint states.

However, Rosenstein claims he has since tried to recover his legal costs from the sellers, and has been rebuffed.

He believes Corcoran has a legitimate claim, elsewhere stating that “there is no question that defendants breached [the agreement not to deal with brokers] by ‘dealing with’ Corcoran.”

Rosenstein is also claiming that the sellers breached a non-disclosure portion of their contract by releasing his name to various brokers and the press, causing his purchase to be widely reported in several media outlets, which he described as “negative publicity” for his family. Rosenstein had hoped to remain anonymous through the use of LLCs in the sale process.

Rosenstein and his counsel, Matthew Dontzin, David Fleissig and Jason Kolbe of Dontzin Nagy & Fleissig, weren’t immediately available for comment.