The Australian partner in a downtown Miami tower claims in a lawsuit that East End Capital, the co-owner of the property, is trying to cheat it out of $860,000 it deposited in a failed bid to purchase the entire building.
Investors Errol Dorfan and Kim Davis, through their 100 & 130 Biscayne, say in a lawsuit that in March they made a push to buy East End Capital’s interest in the 30-story 100 Biscayne office tower and next-door garage. It was ready to pay more than $1.6 million, putting the deposit in an escrow account.
New York City-based East End Capital as well as its founders and managing principals Jonathon Yormak and David Peretz “brazenly” told the escrow agent not to return the money, even though the deal did not go through, according to the complaint.
Then 100 & 130 Biscayne sued Yormak, Peretz and their EE NWT OM, through which they hold their property ownership share, as well as escrow agent First American Title Insurance. The civil complaint was filed July 9 in New York City.
The claims add to the ongoing tiffs between the Australian investor and East End. They bought the 324,407-square-foot tower at 100 Biscayne Boulevard for $84 million in 2016.
While other court cases also reveal the partners’ shaky relationship as well as at least one failed attempt to sell, the latest complaint also makes allegations of rocky financing. Two lenders were on the brink of filing for foreclosure after the ownership entity, New WT Miami, defaulted in May, but forbearance agreements were worked out in June, according to the suit.
An East End Capital spokesperson pushed back on the complaint, saying it lacked substance.
“This lawsuit is merely another part of the pending set of specious claims” by the investor in connection to 100 Biscayne, the spokesperson said in an email.
As for the $860,000 deposit, it was brought on when Yormak and Peretz notified the Australian partner last January that the tower was to be sold, according to the complaint. 100 & 130 Biscayne responded in March that it would buy out East End’s stake pursuant to their joint agreement.
The complaint says Yormak’s and Peretz’s EE NWT OM owns 20 percent of the property through a joint venture group but it also is the operating partner, while 100 & 130 Biscayne has an 80 percent stake.
Not only did East End reject the buyout notice as “non-conforming,” but the loan forbearance agreements dictate the property is to be sold, the suit says. The goal is to close by Sept. 7, although this could be extended.
Cushman & Wakefield is marketing the property.
The complaint says the forbearance, which also allows the lender to immediately file for foreclosure in case the agreements are breached and seek a receiver, essentially nullified the planned buyout of East End.
The attorneys involved in the case did not respond to requests for comment.
In another lawsuit, Dorfan and Davis accused East End, Yormak and Peretz of misleading them into ponying up funds toward the purchase and renovation of the allegedly money-losing tower. The two Australians are seeking more than $50 million in damages.
East End, Yormak and Peretz filed to dismiss this suit. In a memo supporting their motion, they denied claims they were project “promoters” who “solicited” 100 & 130 Biscayne’s investment, saying that the Australian company is a “sophisticated investor” and a majority owner of the partnership with control over its management.
In a third case, a Miami-Dade Circuit Court judge ordered East End, Dorfan and Davis to pay back a $5.5 million deposit to the would-be tower buyer. BentallGreenOak was poised last year to pay $98.8 million for the property but the deal unraveled over incomplete estoppels provided by the sellers.