Zamir Equities slapped with lawsuit over construction overruns at the Setai

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Investors in the Setai, a condo and spa development at 40 Broad Street, have filed a lawsuit against the building’s developers for understating the costs of the project by nearly $24 million. In addition to permitting construction overruns, the suit alleges, Zamir Equities conducted a “sham” closing in order to meet a June 2008 deadline for at least one condo purchase. The closed unit was sold to an affiliate of the developers, the suit claims, triggering a costly slew of lawsuits. Zamir also allegedly diverted construction funds from the project to a restaurant the company had leased on the ground floor. The plaintiff in the case, the DelShah Group, invested $4.185 million in the project in March 2007, and is now seeking punitive damages and reimbursement for legal costs. [NYO]

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