Shvo Sues Core Club, Says It Owes $178M

Michael Shvo’s firm is going on the attack against Core Club.

After the members-only club sued Shvo for $600 million last year, an entity tied to Shvo is seeking $178 million from Core Club in a new lawsuit filed in California.

Shvo alleges the ritzy social club failed to approve design plans required to build out the club’s space at the Transamerica Pyramid, leading to delays. Shvo alleges Core Club’s lack of action and delays constituted a default. And in November 2024, Shvo ultimately terminated Core Club’s lease.

Now, Shvo and his partners allege Core Club owes $178 million for payments owed on the remainder of Core Club’s 20-year lease.

The social club was set to be a key tenant for Shvo’s revamp of the Transamerica building and Shvo’s office building at 711 Fifth Avenue in Manhattan. Instead, the two have traded barbs in New York State court. Things heated up even more this week after Shvo initiated an eviction of Core Club in the Fifth Avenue building.

Core Club fired the first shots, claiming Shvo over-promised and under-delivered on opening three club locations with plans to spend $100 million on a buildout. Shvo’s side responded, calling the lawsuit a public hit job, intended to get Core a rent reduction.

Shvo and his German partners, including the pension fund BVK, made a big splash buying the historic 48-story Transamerica Pyramid in 2020 for $650 million. Shvo undertook a $250 million renovation to modernize San Francisco’s iconic tower. The purchase was part of a larger acquisition and development spree by Shvo, which included buying the former Coca-Cola building in Manhattan and building an ultra-luxury hotel and condo project in Miami Beach known as The Raleigh.

But Shvo’s high-end portfolio has faced recent challenges. Construction at The Raleigh has stalled and it could be sold for $275 million. Shvo sold its luxury condo project in Beverly Hills after 10 sales in three years, the Wall Street Journal reported. Separately, Shvo has filed an arbitration claim, alleging he is owed more than $85 million in fees from the German pension fund BVK.

The Transamerica Pyramid was among Shvo’s boldest bets. Shvo finalized the deal in 2020, as Covid forced employees to work from home. Core Club, a high-end members-only club, inked a lease in 2021, which would be offered as an amenity to office tenants.

“After years of failed commitments in both San Francisco and New York, the ownership of the Transamerica Pyramid has lost patience with Core Club,” said Morris Missry of Wachtel Missry, an attorney for the Shvo entity. “We have tried to resolve this and to keep Core Club in the building, but it is now clear that Core Club is unwilling and/or unable to meet its obligations, and legal action is the only option to enforce the lease.”

“It is incredible that Mr. Shvo, who reneged on his promise to fund and build a luxury space for Core in the Transamerica Building due to his own lack of the resources, now seeks rent from Core for the very facility he failed to deliver,” said Marc Kasowitz of the law firm Kasowitz.

Kasowitz said Core believes the project was a “ruse” and will assert counterclaims for damages suffered as a result of “Shvo’s failure to deliver” the Core Club in San Francisco.

A New York state judge recently ordered Core Club to pay Shvo close to $1 million over a loan Shvo provided in 2022. Core Club is appealing the ruling.