The former CEO of Bear Stearns, James “Jimmy” Cayne, claims a co-op board at 510 Park Avenue has blocked him from selling his sixth-floor apartment because of personal conflicts between Cayne and various board members.
In a petition filed in New York’s Supreme Court Tuesday, Cayne demanded access to the board’s books and records to find out why it rejected three prospective buyers without explanation, and denied his request to rent the unit.
According to the filing, acrimony between Cayne and the board traced back to 1999 when Cayne forced the board to sell two “maid’s rooms” through a live auction, rather than a sealed bidding process. Cayne and his wife, Patricia, subsequently got into a bidding war with Lawerence Friedland — now head of the board — which drove up the cost of the room Friedland purchased, the filing states.
“Friedland’s personal animus against the Caynes has resulted in the board repeatedly using its decision-making authority to harm the Caynes, and in a manner that is wholly inconsistent with its decisions concerning similar issues raised by other shareholders,” the petition alleged.
Friedland did not respond to The Real Deal’s request for comment. An attorney representing the 510 Park Avenue Corporation could not be reached.
The Caynes purchased the nearly 5,000-square-foot unit in 1981 for $1.1 million, when Cayne was rising through the ranks of Bear Stearns.
They moved out in 2013, and listed the unit and one maid’s room with superbroker Dolly Lenz. The asking price of $14.95 million was later dropped to $10 million because of lack of interest.
A $9 million offer submitted to the board in March 2016 was declined, despite apparent confidence from brokerage Douglas Elliman, which had taken over the listing. An $8.7 million offer, submitted in May that year, was also denied.
This May, an offer of $6 million was allegedly submitted — and rejected — by the board. The prospective buyer countered with a new offer of $6.75 million but was again turned down, according to the filing.
The petition says a letter sent in June to the Caynes from an attorney representing the 510 Park Avenue Corporation said the board gave the first and second offers “careful consideration” and “made a thorough review of the application, as it did with regard to the 2o16 applications.”
The letter offered no explanation for why the offers were rejected, according to the claim. It noted that “all decisions by the board are strictly confidential and we are therefore unable to comment further.”
Although they have not lived at the property for six years, the couple said they continued to pay more than $9,000 per month in maintenance fees. Furthermore, they claimed they had suffered significant financial losses in the years they had been trying to sell, and had been “deprived of virtually all of the value of their unit.”
They requested access to the co-op’s books back in July, but the corporation allegedly failed to respond.
Marc Kasowitz, an attorney for Cayne, said there were “serious questions” raised by the board’s rejection of prospective buyers, and the board’s “refusal to even respond to Mr. Cayne’s books and records demand only confirms as much.”
Cayne was the CEO of Bear Stearns for 15 years. He stepped down in 2008 amid the financial collapse, and later faced criticism for his management style. “In a time of crisis he flatly wasn’t up to the task,” wrote former Bear Stearns CEO Alan “Ace” Greenberg in his 2010 book, ‘The Rise and Fall of Bear Stearns.’
Cayne is seeking legal costs and other relief, in addition to access to the co-op’s books. He did not respond to a request for comment.