Is Michael Stern and Kevin Maloney’s supertall condominium project 111 West 57th Street heading into foreclosure? We’ll have to wait in suspense a little while longer.
A New York State Supreme Court judge postponed until Monday a ruling on whether the foreclosure can proceed. Last month, Spruce Capital, which recently bought a $25 million slice of the tower’s mezzanine debt, started a strict foreclosure process, which would transfer ownership without going through an open auction.
Ambase Corp, an equity investor in the project, sued to block the move. Ambase’s attorney, Stephen Meister, alleges that Stern and Maloney are conspiring with Spruce to use the foreclosure to wipe out Ambase’s $66 million equity stake in the project, according to Crain’s.
The project faces a capital shortfall amid higher-than-expected construction costs, and the developers and Ambase have been tussling over the project for more than a year. Stern and Maloney allege that Ambase is blocking crucial funding, while Ambase alleges that the developers are using capital calls to dilute its stake.
Earlier this month, The Real Deal reported that Qatar is a quiet investor in the project. [Crain’s] — Konrad Putzier