A state Supreme Court judge today agreed to lift a temporary restraining order on developer Yair Levy to allow the $500 million sale of 620 Sixth Avenue, pending the immediate deposit of about $8 million in proceeds into an escrow fund for his former Rector Square condominium project.
The sale of the 700,000-square-foot retail complex is scheduled to close on Friday, and funds will immediately be transferred to an escrow account, according to lawyers for the Battery Park City condo.
Judge Joan Lobis continued to block the sale or transfer of any additional assets from Levy or his family, however, which lawyers for the Battery Park City condo say was done to illegally circumvent a judgment after the troubled developer was banned from the real estate industry for raiding the Rector Square reserve fund.
“I think this is a great outcome,” said Brian Belowich, the attorney for Rector Square. “We finally have security and we’ll establish the allegations that are contained in the motion papers.”
Rector Square filed suit against Levy for allegedly failing to pay towards the $7.4 million judgment rendered against him in June of this year. Former Attorney General Andrew Cuomo filed suit against Levy amid evidence that he spent millions of dollars of the condo’s reserve fund on personal expenses, even though a condo reserve fund must only be used for critical repairs to a project, like heating, roof repairs, air conditioning or other essential systems.
Levy lost control of the condo in 2009, after Anglo Irish Bank foreclosed on the property and sold the unsold shares to Related Cos., which originally sold the building to Levy and managed the property under a court appointed receiver.
Levy is partners with investors Joseph Chetrit and Charles Dayan in the property, which is being sold to RXR Realty for about $500 million. The site includes two major big-box retailers, including TJ Maxx and Bed Bath & Beyond.
Rex Whitehorn, who is representing Levy in the court case, was not immediately available for comment, and nor was Chetrit. RXR declined to comment through a spokesperson.