Manhattan landlord William Koeppel has unleashed another salvo in his years-long legal dispute with his mother and sister, seeking at least $10 million to shield him from overcharge claims brought by tenants of a Turtle Bay apartment building.
In a complaint filed in bankruptcy court Tuesday, Koeppel alleges that his mother, Roberta Koeppel, and sister, Alexandra Koeppel, are the ones responsible for any rent overcharges on regulated apartments at 350 East 52nd Street. Tenants in the building filed a class action lawsuit in 2011, claiming the Koeppels illegally deregulated apartments while receiving the J-51 tax break.
A state court judge sided with the tenants last year, ruling that the rents needed to be recalculated, but that order is awaiting a decision by the state’s Court of Appeals.
William Koeppel claims that he took control of the 52nd Street property as part of a 2008 agreement stipulating that the trust overseen by his mother would be on the hook for “any rent which must be refunded to a tenant because of an overcharge.”
That stipulation was made with an eye on a then-pending lawsuit accusing Tishman Speyer of overcharging rents at Stuyvesant Town. The 2009 decision in that case, which determined that apartments could not be deregulated while a property received J-51 benefits, inspired a slew of subsequent overcharge lawsuits.
Others in the industry are closely watching how Koeppel’s case plays out in the state’s highest court. The Rent Stabilization Association and the Community Housing Improvement Program filed an amicus brief in the case, calling for a reversal of the lower court’s decision and a clarification on how rent overcharges should be calculated in certain cases.
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Koeppel filed for bankruptcy protection in August, in light of the class-action and to fend off an attempt by Wilmington Trust to foreclose on his $32.1 million mortgage on the 52nd Street property. His latest complaint was filed as part of the bankruptcy case.
The case follows decades worth of feuding among members of the litigious landlord family. William Koeppel is involved in a separate fight over a portfolio of 13 other properties controlled by a trust overseen by his mother and sister. He is suing to have them removed as trustees, alleging that they have allowed the properties to fall into disrepair.