After being hit by at least 18 lawsuits in the past two years by creditors and investors, active Brooklyn-based investor Chaim Miller is striking back.
Miller is suing fellow developer Joseph Brunner over a Greenpoint development site at 49 Dupont Street, for allegedly failing to repay a loan Brunner used to acquire the site.
In a lawsuit filed Monday in Kings County Supreme Court, Miller claims he lent Brunner $4.3 million to help him secure a letter of credit from Investors Bank toward the purchase of 49 Dupont, which has 260,000 buildable square feet.
Brunner was required to provide a $4.7 million collateral for the purchase, so the seller could ensure he complied with the terms of a remediation program for the site, which was once a plastic factory, according to the suit.
The property consists of 10 parcels at 2-24 Clay Street, 280 Franklin Street and 49-93 Dupont Street.
The site was listed on the state registry of inactive hazardous waste disposal sites, and was also listed on a database that tracks spills, according to the complaint. The New York State Department of Environmental Conservation required the property’s owner to implement a remedial program and eventually obtain a certificate of completion.
“Brunner did not have the adequate collateral to obtain the $4.7 million letter of credit,” the complaint states, so he borrowed the lion’s share of it from Miller.
In August 2012, Brunner, under the entity Dupont Street Developers, acquired the site for $23.3 million, city records show. Although Miller claims Brunner’s letter of credit has since been released, he says he is yet to be repaid.
Brunner used “multiple shell limited liability companies in a high stakes game of three-card Monte to hide the identity of the current owners of [49 Dupont] and to avoid his financial obligations to Miller,” the complaint states.
It adds: “This is the first in what is expected to be a series of lawsuits intended to uncover the details and remedy a massive fraud and scheme orchestrated by Joseph Brunner to wrestle control of a valuable property.”
Queens-based investor Bo Jin Zhu took a stake in the property last year, as The Real Deal previously reported. Miller made an unsuccessful attempt at acquiring the site from Brunner.
Although Miller would not comment on the lawsuit, a source close to him told TRD it was “shocking someone from the same community would do this.”
Miller is involved in a web of lawsuits related to his property deals, as TRD reported earlier this month, and Brunner is tied up in litigation over the $22.3 million purchase of a Bedford-Stuyvesant development site.