The Real Deal New York

Macklowe and CIM disagree on value of 432 Park stake

During his divorce trial, Macklowe claimed he would “speak openly” with his partners
By Chava Gourarie | December 07, 2017 07:45PM

From left: Harry Macklowe, 432 Park, Shaul Kuba (credit: DBOX for CIM/Macklowe Properties and Getty Images)

Harry Macklowe says he won’t fight his partners, CIM Group, on their determination that his stake in 432 Park is worth just $48 million. Not yet, anyway.

The titan was back on the stand Thursday in his ongoing divorce case, which will determine how he and his wife of 58 years, Linda Macklowe, will divide up their estimated $2 billion fortune.

At issue was the value of his stake in his magnum opus, the supertall 432 Park. Up until last year, Macklowe had calculated that his stake was worth over $400 million, one quarter of the expected $1.8 billion in net proceeds, or half of the 50 percent stake to be split between himself and CIM Group, the equity partner in the project, according to his testimony.

But now, Macklowe is claiming that his interest in the property disintegrated, from over $400 million to $48 million.

Macklowe referenced a 2016 email from CIM, in which he learned that their joint stake had been reduced to 39 percent, and that his interest was valued at $48 million because of increased costs and a difference in opinion on the calculation of the disbursement.

Harry acknowledged in court today that he was surprised by the figure, to which Linda’s lawyer, John Teitler, asked if he intended to pursue a claim against CIM over the issue.

“I am not currently pursuing a claim,” Macklowe responded, but said he intended to review the terms before making his own determination as to the value of his interest.

“And if you found that there was a disagreement about the terms, how would you proceed?” the presiding judge, Laura Drager, pressed.

“I would speak openly with my partners,” Macklowe said. “I doubt that I would have to litigate.”

Teitler switched to a different line of questioning, in an apparent attempt to argue that Macklowe’s use of personal guarantees and other business decisions led to losses at of some of his properties, hurting the value of the couple’s shared assets.

But the judge was having none of it. “I don’t see the purpose of this,” she said, and launched into a takedown of Teitler’s argument. “At the end of the day, so what?”

Linda, who kept her lime-green striped sunglasses on during the court proceedings, turned to Teitler. “Would you open your mouth and say something?” she whispered.

“I am sorry that the party’s assets went down to over a billion dollars,” Judge Drager continued sarcastically, but she said, Harry’s failures had no legal relevance to the court.

“Sometimes you win, sometimes you lose,” she said. “That’s the nature of the business.”