Developer Steve Witkoff has a federal judge’s blessing to sell The Park Lane Hotel as part of an agreement to oust scandal-plagued Malaysian investor Jho Low.
U.S. District Court Judge Dale Fischer approved plans by Witkoff [TRDataCustom] and the Department of Justice as part of a cooperation agreement reached last year after Low became ensnared in a massive money-laundering scandal.
Initially, Witkoff and the Department of Justice asked the court to approve a sale of Low’s majority stake. Now, the plan is to sell the property entirely, the Wall Street Journal reported.
The judge approved the plan over Low’s objections. Low provided most of the equity for the $654 million acquisition of the 26-story hotel in 2013. Low is at the center of a money-laundering scandal, in which he allegedly siphoned hundreds of millions of dollars from a Malaysian investment fund known as 1MBD and funneled that money to investment in real estate, including The Park Lane.
Low, who owns a majority interest in the hotel, sold a portion of his stake to Mubadala Development Corp., an Abu Dhabi sovereign wealth fund. Mubadala initially objected to the sale, and said the project’s investors would be better served by selling the project in its entirety. The fund also wanted an independent broker, not Witkoff, to lead the sale.
The judge’s order stated that Witkoff “will be sufficiently checked” by the government, Mubadala and other lenders, to prevent any “attempt somehow to unfairly enrich” himself.
Last year, sources told The Real Deal the hotel could fetch upwards of $1 billion if sold.
Witkoff and the DOJ previously said the project is in a precarious financial position, since cash flow doesn’t cover its $480 million in debt. [WSJ] — E.B. Solomont