A judge has sided with Thor Equities in a lawsuit involving a failed sale of 933 Broadway, allowing Joe Sitt’s firm to keep the $1.2 million deposit from the would-have-been buyer, Mactaggart Family & Partners.
The lawsuit stemmed from a dispute over how to count days to determine a key deadline in a nearly $24 million now-collapsed transaction in the Flatiron District.
On March 11, 2020, Mactaggart Family & Partners signed a contract to purchase the Thor retail building. But the family office backed out on May 7, asserting that Thor defaulted on the agreement by not providing documentation for all leases held by the building’s tenants by the deadline, defined in the contract as “at least two business days before the closing date.”
The closing date was set for Monday, May 11, and in Mactaggart’s interpretation, the deadline for providing documentation passed at midnight on May 6. The firm sued Thor to get the deposit back.
Thor, however, argued that Mactaggart breached the contract by prematurely exiting on May 7, even though Thor had until midnight of that day to submit all documents. In its counterclaim, Thor asked the judge to dismiss Mactaggart’s lawsuit and to keep the deposit.
Justice Louis Nock, who presided over the lawsuit, agreed with Thor’s interpretation of the deadline, saying May 7 was the last business day “on which [Thor] could timely deliver” the documentation. On top of losing the $1.2 million deposit, Mactaggart is required to cover Thor’s costs for attorneys, according to the judge’s decision. Trial court rulings in state Supreme Court are almost always appealed, so Thor is not in the clear yet.
The dispute likely wouldn’t have happened if not for the pandemic. When the sale contract was signed, 933 Broadway was a thriving retail building with tenants such as Le Pain Quotidien and Godiva Chocolatier. But shortly after the contract signing, the pandemic ravaged the retail industry.
In April 2020, Le Pain was reportedly looking to close some of its stores. Around the same time, Godiva told Thor that it would cease paying rent. Mactaggart argued in court that these changed tenant conditions should have allowed it to terminate the contract even before the deadline, but the judge wasn’t convinced.
Mactaggart and law firms representing Mactaggart and Thor did not immediately respond to requests for comment. Thor declined to comment.