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AUTHOR: Simon Galkevich,
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ART: Roy Moussaieff, East Harlem, 2252 Third Avenue from 2019 article, and.
STORY TYPE: news
SECTOR (choose one of these): Development
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CSN Realty Corp. scored a win in its pursuit to collect a $3 million judgment over a failed East Harlem development project.
The firm filed a lawsuit against Roy Moussaieff and Yousef Althkefat in 2024, seeking repayment from the two real estate developers. The action was dismissed last year by the Supreme Court in New York County, but was reinstated by a New York intermediate appellate court in May.
CSN entered into a contract to sell the commercial property for $12 million to 2252 Third Avenue, LLC, a single-purpose corporate entity, in 2018.
Moussaieff and Althkefarti planned to build a 20-story mixed-use building in East Harlem. An application pre-filed with the city’s Department of Buildings showed the project was slated for 2252 Third Avenue, between 122nd and 123rd streets, spanning 53,900 square feet with 61 residential units and retail space.
But the buyer failed to close on the property by the deadline set for March 1, 2020, which resulted in the termination of the contract in 2021.
In August 2023, CSN won the $3 million judgment in accrued penalties and extension fees against 2252 Third Avenue, LLC, but was never able to collect the money. CSN filed a lawsuit to pierce the corporate veil and hold Moussaieff and Althkefati personally responsible for the debt in May 2024.
In the lawsuit, CSN claimed that Moussaieff and Althkefati used a shell entity — which, the filing notes, “had exactly $0.00 in its account” at the time when they claimed to have enough funds to close on the $12 million deal — to secure a risk-free contract that effectively froze property for years and consequently evade liability.
A unanimous appellate decision to reverse a lower court’s dismissal means that litigation will proceed to the discovery phase. CSN will make another attempt to break through the corporate protection and hold Moussaieff and Althkefati accountable.
While the Appellate Division’s First Department typically takes a different approach in similar cases, this decision makes clear that courts will “look past the corporate form when there are sufficient allegations that the structure itself was the instrument of the fraud,” noted Oved & Oved, CSN Realty Corp.’s counsel.
“The First Department has spoken – unanimously, and its message is clear – you can’t abuse the corporate form, walk away from the damage you’ve created and expect the courts to look the other way. They didn’t. Neither will we,” said Terrence Oved and Darren Oved. Attorneys for defendants didn’t return the request for comment.
On June 29, Moussaieff and Yousef Althkefati filed verified answer and affirmative defenses where they denied allegations and argued that there’s no basis for lifting the corporate veil. Developers also contend that they are not parties to the contract. Additionally, the defendants are calling for the deposition of Freddy Srour, CSN’s principal, on December 15.
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