Courts roundup: $82M Worldwide Plaza lawsuit, Fairstead sues Blodgett, $3.2M East Harlem loan default

$82M partnership dispute at Worldwide Plaza: The entity that owns 50.1 percent of the 2 million square foot complex Worldwide Plaza at 825 Eighth Avenue in Midtown West, a company called New York REIT Liquidating LLC, alleges co-owners RXR Realty and SL Green Realty, through the entity WWP JV LLC, are improperly asking for an $82 million capital contribution.
Court filings represent the position of one party and are not necessarily accurate or complete.

According to the complaint, “A justiciable controversy exists because Administrative Member [RXR Realty and SL Green Realty joint venture] has asserted that Owner Member [New York REIT Liquidating LLC] is obliged to make unapproved capital contributions exceeding $82 million, despite the fact that any obligation to make such contributions expired nearly four years ago, on December 31, 2018, under the express and unambiguous terms of the LLC Agreement.” The ownership agreement states the New York REIT entity owns 50.1 percent, the RXR Realty and SL Green Realty joint venture owns 48.7 percent, and George Comfort & Sons owns 1.2 percent.

According to an end of 2021 filing from New York REIT Liquidating, “At December 31, 2021, the Company’s only significant assets are a 50.1% equity interest in WWP Holdings LLC (“WWP”) which owns one property, aggregating 2.0 million rentable square feet, with an occupancy of 91.3%, and a $90.7 million cash reserve to be utilized for improvements at WWP. The Company’s property consists of office space, retail space and a garage, representing 88%, 5% and 7%, respectively, of rentable square feet at December 31, 2021.” NY State Court LINK

Direct link to the property’s ACRIS page and link to DOB NOW portal.

Fairstead sues William Blodgett, 5 months after Blodgett sued Fairstead: Fairstead alleges former partner William Blodgett stole data and trade secrets, among other allegations, in contravention of employment agreements. According to the complaint, Blodgett used the information in the launch and expansion of his new company, Tredway, including making an offer on a $1 billion asset. This suit comes five months after Blodgett sued Fairstead in July 2022 to enforce an arbitration, 652582/2022.

In Blodgett’s suit, he alleged the principals of Fairstead sought a stake in Blodgett’s new venture Tredway, and notified him in September 2021 that he would be stripped of his equity in Fairstead and related companies, which he helped build since the firm was launched in 2013.
The arbitration is also being heard in the Delaware Court of Chancery under case number 2022-0673-JTL, titled Fairstead Capital Management LLC and FCM Affordable LLC v. William Blodgett. NY State Court LINK

$3.2M alleged loan default in East Harlem: In August 2015, the owner of a commercial condominium unit in the building 1885 Lexington Avenue in East Harlem, borrowed $4 million secured by the commercial condo unit. According to the complaint filed by lender OceanFirst Bank, the loan has not been repaid. “The maturity date of the Note was extended to June 1, 2021 by Extension and Modification of Note (Exhibit “C”), and then further extended to October 1, 2022.” The condo building with 29 residential units in East Harlem has 41,172 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 134 feet and is 67 feet deep with a total lot size of 6,564 square feet. The lot is irregular. The zoning is R7D which allows for up to 4.2 times floor area ratio (FAR) for residential with inclusionary housing. LINK