Shvo fires back at Core Club

Michael Shvo on Monday answered the Core Club’s $600 million-plus lawsuit against the developer and his associates.

Shvo’s legal team filed a motion to dismiss the wide-ranging suit by CEO Jenny Enterprise, who founded the elite members-only Core Club based in New York City. It framed Core Club as cash-strapped and called its lawsuit “a kitchen sink of frivolous claims” and “a public hit job” intended to yield a rent reduction, a lease rescission and other concessions.

With Shvo’s help, Enterprise planned to expand the club to the Transamerica Pyramid in San Francisco and internationally to Milan. In June she sued Shvo, his eponymous firm and his investors, alleging they overpromised and underdelivered on opening three club locations.

Only the New York City club, at Shvo’s 711 Fifth Avenue, is operating.

Shvo’s motion said Enterprise’s claims of fraud contradicted written agreements between the two. The club’s leases in New York and San Francisco promised only $50 million in construction allowances, according to the filing. Core Club was responsible for any overages — millions of which the business now owes, it stated.

Enterprise’s lawsuit had called the Milan club a “cornerstone” of her agreement with Shvo, but his response downplayed it as a possibility that was “explored” but did not materialize.

The drama began in early June when a Shvo-controlled entity sued Core Club, demanding repayment of nearly $1 million on a loan. The sides differ in their account of what seemed to be a straightforward 2022 agreement. The club drew down $750,000, only for Shvo to withhold the remaining $250,000. The original case is still pending in New York state court. 

Shvo’s response also addresses the club’s claim that he racked up an $80,000 tab at its Fifth Avenue location with personal events. It says the Enterprises’ made “many requests that Shvo and his wife entertain at the club to assist them with attracting new members.”

In a statement, Enterprise’s lawyer, Adam Glassman, called the motion “riddled with distortions and mischaracterizations of the facts.”

Shvo “presented himself as a trusted partner… then used this position of trust to enrich himself at their expense, negotiating an unconscionable lease and failing to fulfill his financial commitments,” Glassman said.

Glassman blasted Shvo’s claim that Core Club benefited from a $50 million investment.

“We look forward to reviewing Mr. Shvo’s and his affiliates’ financial books and records in this regard,” the statement said. “All prior requests by my client for such records have fallen on deaf ears.”

Enterprise is seeking $100 million for losses, $500 million in punitive damages, and $15 million in special damages, as well as the rescinding of the club’s lease at the Transamerica Pyramid in San Francisco.

Shvo’s equity investor and one of the co-defendants, Bayerische Versorgungskammer, released a statement last week distancing itself from the claims in the lawsuit.

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