By Al Barbarino
Two rival investment firms are battling over a Meatpacking District property that’s entwined in a web of legal disputes.
Michael Shah of DelShah Capital LLC and his lawyer are backing the investment firm’s announcement last week that it acquired 55 Gansevoort Street, a five-story, 26,000 s/f office and retail building.
“The deed has already been transferred,” Michael Shah’s lawyer, William F. Savino, of law firm Damon Morey, told Real Estate Weekly this week. “This is totally proper.”
But Jeffrey Menaged, principal at rival investment firm Orbis Capital Advisors, called the purported deal a “sham transfer” and says the deed is invalid. It’s actually Orbis that is negotiating an agreement with Robert Rominoff — a trustee of GHC NY Corp., the cash-strapped entity that owns the building — to pay off the property’s debt, he said.
“We don’t believe there has been a legal transfer of title,” Menaged said. “I don’t even know how they could think this is okay. They got a signature from someone who is unauthorized to transfer the title.”
It was Gerald Rominoff, Robert’s father, who signed the deed, a copy of which was sent to Real Estate Weekly.
“Serving as officer of GHC Corp., Gerald Rominoff had the authority to do this and he made the right business decision to make the transaction,” Sovino said.
But Menaged pointed to pending litigation and other documents that he says prove otherwise and show that, as the beneficiary of the trust that has primary interest GHC Corp., Robert Rominoff has the right to redeem the debt on the property.
A Grantor Trust agreement from November 2009 states that Gerald Romanoff, despite power to invest funds and veto investments, will “under no circumstance” have the right to “benefit himself individually, directly or indirectly, with respect to any portion of the Trust’s income or principal.”
Also, during a July court hearing, Robert Rominoff’s lawyers attempted to obtain a “stay,” or freeze the foreclosure of the property; New York State Supreme Court Judge O. Peter Sherwood denied the motion, but he also stated that any title transfer would need his stamp of approval, which has not yet occured.
During the court proceedings, Robert Rominoff’s lawyers claimed that GHC Corp is “99 percent owned by the trust of which Robert is co-trustee and sole beneficiary,” and that his father is interfering with his right to redeem the mortgage.
“He’s entitled to a payoff, and he has done a joint venture and has the funding and is ready, able and willing to redeem the mortgages,” Robert Rominoff’s lawyer, Cecily Harris stated.
But the property’s receiver, Bradley Silverbush, countered that because Robert Rominoff defaulted on his loans and rent payments that “he’s no longer the caretaker,” adding that “the lease that he did have was given to him by his father in a sweetheart deal at far below market.”
Michael Shah did not return calls seeking comment in time for publication, but despite the ongoing litigation, his lawyer, Sovino, assured Real Estate Weekly that the principal and CEO of Delshah Capital is already making plans for the building’s future.
“He’s doing what he wants to do with the property,” he said.