A former investor in the Cascade Linen Factory is airing his dirty laundry in public, filing a lawsuit to recover what he claims he’s owed from the site’s $70 million sale last year.
Barry Hers, a Brooklyn-based landlord, is suing Alliance Capital’s Mike Kohn for $7.4 million, according to the lawsuit filed in Kings County Supreme Court late last month.
Kohn purchased the Bedford-Stuyvesant development site — made up of nine parcels along Marcy and Myrtle Avenues — for $27 million three years ago, and, according to the lawsuit, agreed to transfer 40 percent ownership of the property to Hers in exchange for $2.4 million. But when Kohn sold the site in April 2015 for $70 million to a group of Hasidic investors, Hers says he was never compensated.
Following the sale, Hers learned Kohn reinvested the $43 million profit from the sale to purchase other properties without his consent, the lawsuit alleges.
Looking to settle the dispute, Kohn and his partner Fred Werber met with Hers and agreed to transfer his membership interests into four rental properties located in Borough Park that Kohn owned, Hers claims in legal papers. Hers is now seeking an ownership claim in those properties and at least $7.4 million from Kohn.
A lawyer for Hers could not be reached on Monday. Kohn told The Real Deal last week that he was in negotiations with Hers to settle the lawsuit.
In March, TRD reported that the new owners of the Cascade Linen site in March were seeking $144 million in financing to construct a large religious housing development.