A New York state court threw out a lawsuit yesterday by the former president of United Realty Partners over an allegedly improper fund transfer that resulted in the firm’s disqualification as a prospective buyer of 866 United Nations Plaza.
New York state Justice Eileen Bransten found that the dispute between former United Realty president Eli Verschleiser and current CEO Jacob Frydman should be sent to arbitration. The plaintiff, Verschleiser, had requested that the judge enforce an operating agreement with the defendants, Frydman and the rest of United Realty. Bransten said the agreement involved a broad arbitration clause that would require both sides to settle any related disputes outside of court.
Meadow Partners closed on the $200 million acquisition of the office tower, near 49th Street and between First and York avenues, from Vornado Realty Trust. United was contemplating partnering with Meadow on the buy, as The Real Deal reported in November. Meadow and United entered contract, but United’s investor group failed to raise enough money and in the end Meadow purchased the 360,000-square-foot asset alone.
Verschleiser, formerly of United, alleged that United and its CEO Jacob Frydman improperly transferred $6.9 million of investors’ funds after Verschleiser resigned. Frydman still controls the funds, the suit says, despite the fact that they were not deployed in the failed bid to purchase 866 U.N. Plaza. [Law360] — Mark Maurer