The Real Deal New York

Dubai-based brokerage Greenstone sues Mack Real Estate over fees from $100M Saudi Aramco investment

The company alleges Mack refused to pay $1.8M for arranging meeting with Aramco
By Ben St. Clair | April 21, 2017 03:15PM

Alex Gemici of Greenstone and Richard Mack

Greenstone Equity Partners is suing Mack Real Estate Group and its affiliate Claros Mortgage Trust (CMTG) over a $1.8 million payment it says it earned for brokering an eventual $100 million investment.

The suit, filed Thursday in New York State Supreme Court, alleges Mack and CMTG have refused to pay the Dubai-based investment brokerage its fee for arranging a meeting with the Saudi Arabian Oil Company, known as Saudi Aramco.

According to the suit, Greenstone played matchmaker between Aramco and Mack in February 2016. By June of that year, the Saudi oil conglomerate pledged to invest $100 million with Mack. Less than 90 days later, Mack said it was terminating the agreement with Greenstone, which entitled it to a fee for arranging the meeting, the suit alleges.

But in March of 2017 Aramco did in fact follow through on its original commitment to invest $100 million in the real estate firm, the suit says.

Greenstone sent a “success fee” invoice for $1.8 million in April, but Mack rejected the collection effort and said “Aramco’s investment bears no connection to any introduction made by Greenstone,” according to the suit.

“It is clear that the Defendants had no intention of paying Greenstone’s earned Success Fee and that Defendants deliberately and maliciously represented otherwise,” the suit states.

“If there is a lawsuit, we are confident it is baseless and entirely without merit,” said a spokesperson for Mack.

It’s not clear from the suit how the $100 million in capital would be deployed.