The Real Deal New York

The saga continues: Former 45 John owner goes after recipients of down payment

Chaim Miller allegedly divvied it up to pay creditors on another project
By Kathryn Brenzel | October 11, 2017 04:10PM

45 John Street

The former owners of 45 John Street are now going after a slew of people and companies whom they claim wrongfully received $11.8 million from an embezzled down payment on the property.

Chun Peter Dong and other investors, operating under the entity 45 John Lofts LLC, filed a lawsuit against Meridian Capital Group, Mega International Commercial Bank, landlord Chaim Schiya Babad, developers Joseph Brunner and Abe Mandel and 13 others in an attempt to recoup the down payment. The lawsuit alleges that Chaim Miller, who once held a minority stake in the failed condominium conversion and is accused of trying to sell the property without Dong’s consent, dispursed $11.8 million to the defendants from a down payment on the property.

An attorney for Dong, Eric Snyder, said Miller divvied up the down payment in order to pay creditors on another project and for other personal reasons unrelated to 45 John Street.

“This is very unusual because the money was taken,” he said. “This was a down payment that wasn’t put into escrow. It wasn’t held for the benefit of the company. It was taken from the company.”

The lawsuit is just the latest chapter in the protracted battle over the troubled condo conversion in the Financial District. In March 2014, Miller and Dong purchased 45 John Street for $60 million from Josh Zegen’s Madison Realty Capital. Madison also provided Miller with a $45 million acquisition loan for the deal. The next month, Miller sold off the bulk of his 68 percent stake in the building to other investors. But in February 2015, Dong sued Miller, claiming he quietly tried to sell the property to Orin Management for $66 million without consulting the other owners.

The property was eventually sold at a bankruptcy auction for $73.6 million to an LLC controlled by investor Alexander Levi. Madison Realty Capital, who held the debt on the property, received most of the proceeds from the sale, at least $53 million. Representatives for Madison didn’t immediately return messages seeking comment on Wednesday.

Miller, who isn’t named as a defendant in the latest lawsuit brought by 45 John Lofts LLC, has been the target of more than two dozen lawsuits brought by ex-business partners and lenders since 2014.