Fashion house: After 2 years and 2 lawsuits, Sitt and Dweck still haven’t paid

Yves Salomon claims Thor kept $360K security deposit, ignored court judgment

790 Madison Avenue, Thor Equities CEO Joe Sitt and Bert Dweck (Google Maps, Thor and Premier Equities)
790 Madison Avenue, Thor Equities CEO Joe Sitt and Bert H. Dweck (Google Maps, Thor and Premier Equities)

Just like residential tenants, high-end fashion retailers expect their security deposit back when they move out. But the dollar figure has another digit or two and if the money isn’t returned, they are more likely to sue.

Case in point: Yves Salomon, Joe Sitt and Bert H. Dweck.

The retailer has accused Sitt’s Thor Equities and the landlord’s business partner Dweck of refusing to return a $360,000 security deposit after the fashion house’s lease expired at 790 Madison Avenue and of fraudulently diverting the money to their personal accounts, according to a lawsuit filed June 7 in Manhattan.

The state lawsuit also names East 33rd Realty LLC, an entity owned by Sitt that served as Yves Salomon’s landlord, and Jensen Equities, a company through which Dweck allegedly received the transfers.

Yves Salomon paid its security deposit to the LLC when the Paris-based retailer opened its first New York City location at 790 Madison Avenue in 2015. Dweck was Thor’s director of leasing at the time and responsible for receiving such payments, according to the lawsuit.

When Yves Salomon’s lease expired and the company vacated the space in March 2020 — as the pandemic shut down New York — Sitt allegedly did not hand over the security deposit. When the retailer inquired, all it heard was “the sound of crickets,” according to its lawsuit.

Yves Salomon sued East 33rd Realty LLC in federal court later that year to recover the deposit. Attorneys for the company said Sitt ignored the suit, and last August, the court awarded Yves Salomon a judgment of almost $404,500 — the deposit, plus 9 percent interest and other costs.

But Sitt ignored that too, as well as a post-judgment discovery and subpoena, according to the latest lawsuit.

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Through a spokesperson, Thor Equities pleaded ignorance.

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“There has been a transfer of the management and control of this property long ago to Bert Dweck of Premier Equities,” the spokesperson said in a statement. “Thor was not aware of the allegations, and it will be investigated.”

The allegations go beyond a failure to return the deposit. The fashion house’s lawyers got hold of Sitt’s books to see where the money ended up.

They subpoenaed East 33rd Realty LLC’s account records at Signature Bank and alleged that Sitt used the entity as his “personal piggy bank” between June 2019 and May 2020.

Sitt, listed as the account’s sole managing member, allegedly transferred close to $600,000 to himself and Dweck’s Jensen Equities as far back as 2019, according to bank records. The $600,000 involved distributions and proceeds from overseas auction sales, according to the lawsuit.

Sitt allegedly mixed his business assets with personal money and drained East 33rd Realty LLC’s account, leaving it unable to pay back the security deposit, Yves Salomon’s lawyers claimed.

”East 33rd Realty has been so dominated by Mr. Sitt, and its separate existence as an entity so ignored, that at all relevant times it primarily transacted Sitt’s business instead of its own,” they wrote in the suit. ”There was a unity of interest and control between East 33rd Realty and Mr. Sitt such that they are indistinguishable.”

The company’s attorneys accused Sitt of using the entity to prevent Yves Salomon from receiving its security deposit, and that the transfers were made with the intent of delaying the payment.

Yves Salomon’s attorneys wrote in the suit that Sitt and Dweck’s silence is “both astonishing, yet sadly predictable” because “the $360,000 is gone.”

Bank records also showed that East 33rd Realty LLC’s account “had unreasonably small capital to carry on its business” and had not paid its debts when they came due. The sum of the entity’s assets was less than its debt, according to the lawsuit.

Yves Salomon’s lawyers, employing the term “badges of fraud,” accused Sitt and Dweck of knowing that the entity was insolvent.

The company is seeking the $404,500, plus 9 percent interest as of last August.