Big win for Ian Bruce Eichner in legal war with Manhattan Club timeshare investors

Federal judge ridicules plaintiffs’ case as he dismisses it

New York /
Sep.September 30, 2021 02:52 PM

Real Estate Developer Ian Bruce Eichner had his federal RICO case dismissed by a judge. (Google Maps, Alchetron)

Developer Ian Bruce Eichner has notched a major legal victory against timeshare investors in the swanky Manhattan Club.

A federal judge dismissed a RICO suit filed by 200 timeshare investors at the club against developer Bruce Eichner and Bluegreen Vacations. The lawsuit deals a blow to timeshares investors’ chances of winning future fraud lawsuits against the developers.

Eichner and his affiliated companies have battled the investors over 200 West 56th Street in Midtown for close to a decade.

In 2017, then-New York Attorney General Eric Schneiderman found some merit to the timeshare owners’ gripes and brought a case. The hotel owners settled with the attorney general for $6.5 million over claims that they misled shareholders about the club’s reservations process and their ability to sell back their shares.

The attorney general’s office also found evidence that the Manhattan Club’s sales tactics amounted to a bait-and-switch scheme. As part of the settlement, the Manhattan Club owners and operators were required to sell their stakes and relinquish management control.

In 2018, Boca Raton-based Bluegreen Vacations entered into an agreement to purchase the timeshare inventory and the future right to control the management.

But litigation continued for years anyway.

In the most recent lawsuit, filed in 2020, timeshare investors allege that Eichner and his affiliated companies fraudulently induced them to buy interests in the Manhattan Club between 1996 and 2013. The investors also allege that Eichner affiliates made investors’ interests worthless so the owners could reacquire the timeshare interest at a fraction of the purchase price.

In addition, the complaint alleged that investors were left in arrears by high maintenance fees. Eichner and his affiliates offered to forgive the arrears and buy back the timeshare interests for $100. This allegedly enabled the defendants to reacquire many units that they had sold for tens of thousands of dollars for that nominal sum, according to the lawsuit.

When the case finally came across the desk of Judge Gregory Woods of the Southern District of New York, he did not mince words.

“This case continues the longstanding, unfortunate tradition of dressing up state claims for common law fraud and breach of contract as violations of the civil RICO statute,” the federal judge wrote in his ruling this week.

He said the plaintiffs “lump[ed] together each defendant for nearly every allegation” in a “type of slapdash group pleading.”

“We are pleased with Judge Woods’ well-reasoned decision,” said Jennifer Recine, a partner at Kasowitz Benson Torres who represented Eichner and affiliated companies, in a statement. “Plaintiffs’ claims are entirely without merit, and we look forward to putting this case behind us.”

The judge ruled the plaintiffs failed to establish the existence of an enterprise or a pattern of racketeering activity. He also said the complaint does not show a pattern of racketeering activity and never identifies when plaintiffs were injured by the alleged RICO scheme. The judge granted the defendants’ motion to dismiss with prejudice.

An attorney for Bluegreen Vacations did not return a request to comment, nor did the timeshare investor’s attorney.





    Related Articles

    arrow_forward_ios
    Avison Young’s Keith Caggiano and Roshan Shah with 650 Madison Avenue (Avison Young, Vornado Realty Trust, Getty)
    CRE brokers wrestle over $900K commission for 650 Madison
    CRE brokers wrestle over $900K commission for 650 Madison
    Estate Partners' David Aviram, FIA Capital Partners' David Goldwasser and Steve Croman (LinkedIn, Google Maps, Getty)
    Steve Croman: I was duped by predatory lender
    Steve Croman: I was duped by predatory lender
    From left: McSam Hotel Group's Sam Chang and SL Green's Marc Holliday with 711 Seventh Avenue  (Getty, Google Mpas, SL Green)
    Times Square hotel developer sues neighbors over delayed demolition
    Times Square hotel developer sues neighbors over delayed demolition
     Justice Sandra Sciortino and Newburgh mayor Torrance Harvey (Facebook, Daniel Case, CC BY-SA 3.0, via Wikimedia Commons)
    “Good cause eviction” struck down in Newburgh
    “Good cause eviction” struck down in Newburgh
    Rotem Rosen and Alex Sapir (Illustration by Kevin Cifuentes for The Real Deal with Getty Images)
    Sapir and Rosen settle longstanding legal feud
    Sapir and Rosen settle longstanding legal feud
    A photo illustration of Paterson Mayor Andre Sayegh along with a rendering of the planned development at 305-319 Pennsylvania Avenue (Getty, HannaBS, CC BY-SA 4.0 - via Wikimedia Commons, Paterson City Council, Google Maps)
    Judge upholds approval for 171-unit development in Paterson
    Judge upholds approval for 171-unit development in Paterson
    Attorney General Letitia James with 198 Scholes Street, 11 Gunther Place, 506 Dekalb Avenue and 65 Kent Avenue (Illustration by THe Real Deal with Getty, Google Maps)
    Yoel Goldman’s All Year Management investigated by NY attorney general
    Yoel Goldman’s All Year Management investigated by NY attorney general
    (Illustration by The Real Deal with Getty)
    Developer fires back as Saddle River blocks affordable housing
    Developer fires back as Saddle River blocks affordable housing
    arrow_forward_ios

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

    Loading...