UPDATED, 10:20 a.m., Sept. 6: Real estate investor Dovi Lesches is suing the developers behind Yotel Williamsburg, claiming his stake in the project was sold off without his consent, according to documents filed Thursday in New York State Supreme Court.
Lesches, a partner at the Columbus Circle-based Empire Equities, claims real estate firm Pan Brothers Associates caused him “dire financial harm” by selling off his stake in the 14-story, 110-key Yotel Williamsburg to Synapse Development Group co-founders Albert Picallo and Justin Palmer.
Flatiron District-based Pan Brothers had joined Lesches in forming a partnership to acquire a Williamsburg parcel at 280 Meeker Avenue with the intention of building a hotel, according to the lawsuit. Lesches owned nearly 30 percent in the enterprise, with Pan Brothers retaining majority ownership.
The two developers then teamed with Synapse to purchase the property for $6.2 million in 2013. But Lesches claims he learned earlier this year that Pan Brothers was considering selling out their joint venture to Synapse, and despite “repeatedly” demanding that Pan Brothers keep him in the loop with negotiations, his requests “were virtually ignored,” according to the suit.
Lesches claims Pan Brothers “was improperly seeking to conceal its efforts to maximize its own interests” in any deal. Synapse eventually obtained the entire interest in Pan Brothers and Lesches’ joint venture in June, with Lesches losing his stake in the Yotel project.
The action also concerns a parcel at 644 Lorimer Street, which is part of the Yotel development site. Lesches alleges that Pan Brothers conspired with Synapse to misappropriate the joint venture’s funds and acquire the property for $2.2 million. The parcel was bought through an entity not affiliated with Lesches, leaving him unable to claim a stake in the deal.
Lesches claims his former partners “wasted the company’s assets and wrongfully diverted the company’s opportunity to acquire 644 Lorimer Street, which was the parcel needed to complete the assemblage required” for the Yotel project, according to the complaint.
The lawsuit seeks damages to be determined at trial. Neither Synapse nor Pan Brothers could be reached for comment, while Lesches declined to speak.