Condo board fails to evict buyer of discounted 1MDB penthouse

DOJ sold Walker Tower penthouse at 64% discount

Morgan Stanley's Ron Vinder and 212 West 18th Street (CORE Real Estate, Morgan Stanley, iStock)
Morgan Stanley's Ron Vinder and 212 West 18th Street (CORE Real Estate, Morgan Stanley, iStock)

The condo board of the luxury Walker Tower has suffered another defeat in its attempt to eject the owner of the building’s penthouse.

A New York Supreme Court judge dismissed the claims of the building’s condo board last week, Crain’s reported. The judge threw out the complaint because the condo board failed to put the government — which initially seized the penthouse — as a defendant.

The controversy surrounding the penthouse at 212 West 18th Street began in 2016, when U.S. Marshals seized it from its owner, Emirati businessman Khadem al-Qubaisi. The forfeiture came about as part of a probe into U.S. assets purchased with funds stolen from a taxpayer-funded Malaysian investment vehicle known as 1Malaysia Development Berhad, or 1MDB.

Al-Qubaisi set a downtown Manhattan record at the time with his $50.9 million purchase of the unit in 2014. The government sold it in 2020 for $18.2 million, a stunning 64 percent discount.

The condo board quickly expressed frustration with the deal, claiming there were higher offers for the unit. According to court documents, the pandemic and deterioration of the unit were cited as reasons for the low price.

Shortly after the sale, however, Walker Tower’s condo board attempted to block the transaction in federal court by exercising its right of first refusal. The government successfully argued the board signed away its rights earlier when it gave consent for the government to unilaterally sell the penthouse.

Sign Up for the undefined Newsletter

By signing up, you agree to TheRealDeal Terms of Use and acknowledge the data practices in our Privacy Policy.

Read more

The board appealed the decision. Appellate judges concluded in July that relief must be sought in state court, seemingly giving the condo board another opportunity to undo the sale.

That same month, the condo board passed resolutions declaring the sale void and agreed to pursue legal action to remove the buyer, Morgan Stanley private wealth manager Ron Vinder, from the unit. A complaint was filed with the state Supreme Court and the board ceased accepting Vinder’s monthly common charge payments.

A lawyer for Vinder argued that omitting the Marshals Service and the Justice Department from the latest lawsuit was an “ill-conceived” attempt to avoid federal court. The lawyer also accused the condo board of trying to extort $1 million from Vinder to make up for the transfer tax it would have received if the penthouse sold at a higher price; the board denied that accusation.

In addition to avoiding eviction, Vinder was also awarded costs and attorney fees.

[Crain’s] — Holden Walter-Warner