Joel Wiener affiliates sue Forest City, Brookfield over 111 Worth Street sale

By Varvara Budetti

Two companies affiliated with Joel Wiener, Federal Realty New York and Pinnacle Management Co. are suing Forest City Realty Trust and Brookfield Properties after a contract dispute at the rental building the Wiener entities and Bruce Ratner’s Forest City jointly owned, 111 Worth Street, according to a complaint filed last week in New York State Supreme Court. LINK

Court records include an operating agreement dated August 29, 2000, between Forest City Realty Trust and Federal Realty. Pinnacle Management was included in the contract as a manager of the property. According to the filed complaint, 30 percent of the property was owned by Federal Realty and 70 percent by Forest City. The contract included a stipulation that their consent was required to transfer ownership, according to the complaint.

Court filings are the positions of one party and are not necessarily accurate or complete.

In December 2018, Forest City was acquired by Brookfield Properties and its portfolio, including 111 Worth Street, was sold for a total $11.4 billion. In the suit, Federal Realty claims they were not made aware of the 111 Worth Street sale and instead found out when media reports about Brookfield Properties’ acquisition were published.

According to the complaint, Federal Realty tried to avoid litigation by attempting to, “work with Brookfield in order to preserve the property but with a full reservation of rights,” but, according to the suit, were met with “a continuing stonewall.”

Federal Realty and Pinnacle Management are seeking to nullify the transfer of the property as well as an unspecified amount in monetary damages.

Court records also include a termination notice dated September 20, 2021 sent from Forest City Realty Trust to Federal Realty. The notice states their 2000 agreement is terminated immediately, citing “gross negligence and willful misconduct.” According to Forest City, Pinnacle, as a manager of the property, “paid itself impermissible leasing commissions.” They claimed Pinnacle took an excess of $830,000 and made expenditures that were “designed to enrich itself at the expense of the owner.”

Direct link to Acris document. link