Thor Equities sues Mactaggart over latest broken deal

Developer aims to keep Mactaggart’s deposit after $24 million Flatiron District purchase collapses

New York /
May.May 27, 2020 07:42 PM
Thor Equities’ Joe Sitt and a rendering of 933 Broadway (Credit: Thor)

Thor Equities’ Joe Sitt and a rendering of 933 Broadway (Credit: Thor)

For anyone who thinks time has become meaningless in the coronavirus era, two big real estate investors are arguing over how long two days is.

Joseph Sitt’s Thor Equities and Mactaggart Family & Partners broke out their abacus and calendar as they argued over a key deadline in a nearly $24 million Flatiron District retail deal, according to a new lawsuit.

Thor’s deal to sell 933 Broadway to Mactaggart fell apart earlier this month. And now Thor is suing to keep the latter’s $1.2 million deposit.

A spokesperson for Thor declined to comment. Mactaggart did not respond to inquiries.

According to the lawsuit filed Wednesday, both sides agreed to a “New York style” closing in 60 days when they hammered out a contract in March, meaning no specific time was set.

In order to complete the deal, Thor was required to provide Mactaggart with documentation for leases in the building known as estoppel certificates two business days before the scheduled May 11 closing, which Thor interpreted to mean on or before Thursday, May 7.

The building’s tenants include Godiva and Le Pain Quotidien, and estoppel certificates are frequently a source of contention when deals go sideways. Le Pain Quotidien filed for bankruptcy Wednesday.

Mactaggart argued that the certificates were due by 9 a.m. Thursday. Just before 2 p.m. that day, Mactaggart sent Thor a letter terminating the deal, using the seller’s failure to provide the estoppel certificates as justification.

One week later, Mactaggart’s attorneys provided what Thor considers “a ludicrous analysis of how to count days to reach the conclusion that ‘two days’ before an event really means ‘three days.’”

The would-be buyer claimed that the 9 a.m. deadline actually gave Thor the “benefit of the doubt” and it should have been “nine hours earlier at midnight,” according to the lawsuit.

“Meaning that the deadline to supply the estoppel certificates really expired at the end of the day on May 6, three business days before the closing date,” Thor’s attorneys wrote.

Thor claims the real reason Mactaggart backed is because the buyer failed to line up financing for the purchase — a victim of the coronavirus crisis.

The dispute is just the latest tussle over security deposits to arise from busted deals.

SL Green Realty is suing Jacob Chetrit to get its $35 million deposit left in limbo when Chetrit walked away from a deal to buy the Daily News Building for $815 million.

Investor David Werner is also trying to get back $15 million he put down to buy a multifamily portfolio from All Year Management for $346 million. Brooklyn investor Shulem Herman is seeking the return of $457,500 after failing to close on the purchase of properties in Ridgewood and Bushwick.

Werner is claiming All Year failed to provide information about properties in the portfolio and reduced rents for tenants without his approval. Herman says the seller rushed the closing during the city’s shutdown, then defaulted him for not completing the transaction on time.

Contact Rich Bockmann at [email protected] or 908-415-5229
Contact Sasha Jones at [email protected]


Related Articles

arrow_forward_ios
Gov. Andrew Cuomo (Getty, iStock)

Cuomo to ease requirements for rent relief

Cuomo to ease requirements for rent relief
A federal judge has rejected a lawsuit from a group of New York landlords that sought to challenge pandemic protections for tenants. (iStock)

Landlords lose challenge against pandemic renter protections

Landlords lose challenge against pandemic renter protections
Foot traffic in Union Square, the Flatiron District and Chelsea is down by 50% from February. (Getty)

Foot traffic remains low in prime Manhattan neighborhoods

Foot traffic remains low in prime Manhattan neighborhoods
About 25 percent of employees had returned to work as of Nov. 18 (Getty; iStock)

Offices remain empty, and big cities are feeling the crunch

Offices remain empty, and big cities are feeling the crunch
Singapore (iStock)

Singapore luxury market rebounds despite fewer foreign buyers

Singapore luxury market rebounds despite fewer foreign buyers
The tax break allows foreign visitors to reclaim a sales tax of 20 percent on items bought in the country for more than £30 (Getty; Unsplash)

UK tax break expiration could hurt struggling retailers

UK tax break expiration could hurt struggling retailers
Joe Sitt and Charles Scribner’s Sons Building in Midtown (Thor, Google Maps)

Thor’s $150M loan on 597 Fifth heads to special servicing

Thor’s $150M loan on 597 Fifth heads to special servicing
Cineworld Group CEO Mooky Greidinger and Regal Cinema (Photo via Getty; Wikipedia)

Regal Cinemas scores financial rescue package

Regal Cinemas scores financial rescue package
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...