In 2015, Bill Ackman quietly bought a NYC penthouse owned by the man who warned him about Valeant

Embattled hedge fund mogul, who bought the property from Drew Katz, is now exploring a resale at 420 West Broadway: sources

TRD New York /
Apr.April 19, 2017 01:21 PM

Bill Ackman, 420 West Broadway and Drew Katz (credit: Getty Images)

When Drew Katz, the owner of a company that sells billboard and transit shelter ads, sold his $17 million penthouse at 420 West Broadway in May 2015, the buyer of the property shielded their identity under an LLC.

Now, The Real Deal can reveal that the buyer was embattled hedge fund mogul Bill Ackman, the founder of Pershing Square Capital Management. The two have an interesting history. In January 2015, it was Katz who warned Ackman that there were systemic pricing issues at Valeant Pharmaceuticals, in which Pershing Square held a massive stake. Katz complained in an email to Ackman that executives at the Canadian company were price gouging drugs designed to treat Wilson’s Disease, and healthcare providers were denying patients coverage over the cost of the drug, according to a lawsuit filed by T. Rowe Price. Ackman forwarded the email to Valeant CEO J. Michael Pearson, writing that Katz, who is on the board of Wilson Disease Association, is a “very politically connected and influential person.”

At the time, Valeant was trading between $142 and $160 a share.

Then, on April 20, Katz’s penthouse at 420 West Broadway went into contract, after languishing on the market for nearly a year. An anonymous LLC picked up the unit for $17 million. Multiple sources familiar with the transaction told The Real Deal that Ackman was the buyer.

In September, Valeant’s stock began to collapse. In the next 18 months, members of Congress began demanded hearings over alleged price gouging, class action lawsuits were filed, and kickback scandals took root. Ackman said he did not know the extent of Valeant’s issues and largely laid the blame at the feet of its executives. In March of this year, amid pressure from furious investors, Ackman dumped Valeant and issued a mea culpa to Pershing Square investors, saying he should have dropped the company earlier. His hedge fund lost over $4 billion on its bad pharma bet. Valeant now trades at less than $10 a share.

Ackman, through a spokesperson, declined to comment for this story, and Katz could not immediately be reached for comment.

Word spread that Ackman bought the unit from Katz shortly after he began exploring a resale of the property. Ackman has reached out to brokers to assign the exclusive listing, though it’s not clear when the property will come on the market, sources said.

The three-bedroom, three-bathroom penthouse features a walnut-paneled foyer, a sprawling entertainment space with a fireplace clad in white gold, a terrace with views of the World Trade Center and a Jerusalem Gold Stone staircase.

It wasn’t clear if Ackman ever actually lived in the apartment, though he is in the midst of divorcing his wife, Karen Ann Herskovitz, after reportedly beginning a new relationship with a French ballerina turned businesswoman.

Ackman and Herskovitz have long owned an apartment at the Majestic on Central Park West. Ackman was also famously among a group of investors who bought a $91.5 million pad at One57 on West 57th Street two years ago. He once said he “bought it for fun” and believes he can eventually sell it for $500 million.

As for Katz, he moved on to the largest of three penthouse at the Sterling Mason at 71 Laight Street, for which he paid $22.2 million.


Related Articles

arrow_forward_ios
Keeping lawns freshly cut and outdoor spaces in tip-top shape could result in greater rewards for sellers. (Credit: iStock, IMDB)

Curb your enthusiasm: Homes with spruced-up outsides sell at premium

Elsa Segura (left) was arrested in connection to realtor Monique Baugh's (right) murder (Credit: iStock)

Second suspect charged in real estate agent’s abduction, murder

Clockwise from top left: John Gomes, Ronita Kalra, Eric Beniam and McKenzie Ryan (Credit: Getty Images, iStock, Wikipedia)

“We’re putting ourselves in situations where anything is possible”: Real estate agent’s killing rattles industry

As the years go by_A look back at 17 years of real estate history

A look back at 17 years of real estate history

157 West 57th Street (Credit: iStock)

One57 condo with reduced ask tops a slow week of luxury contracts

Clockwise from top left: 730 Fifth Avenue, Unit #PH21; 730 Fifth Avenue, Unit #18A; The Pierre, Unit #3101; and The Park Imperial, Unit #64

Priciest homes listed last week include $60M pad at Crown Building

250th Issue

The Real Deal celebrates 250 issues

From left: Publisher and founder Amir Korangy, Editor-in-chief Stuart Elliott and VP of Corporate Development Yoav Barilan

TRD’s founders share war stories from over the years

arrow_forward_ios
Loading...