David Werner has filed a lawsuit seeking the repayment of a $15 million deposit he made toward the $344 million purchase of All Year Management’s Brooklyn rental portfolio, CO first reported . The 74-building package consists of 611 residential units and 18 retail stores.
- Legal pretext: Werner claims the sales price had been justified by a rent roll of $1.9 million per month, which is no longer accurate due to COVID. Specifically, Werner alleges that All Year’s Yoel Goldman was offering tenant concessions and discounts without informing him.
- Be Smart: Jonathan Mechanic of Fried Frank noted that buyers often have legitimate reasons to get a deposit back, and other times they are grasping at straws: “You see challenges sometimes that are successful and sometimes that are not… There’s not a claim, by the way, that a pandemic happened. That’s not an excuse for not performing.”
- Israeli bondholders shudder: All Year has paused payments on all four of its outstanding TASE bonds, which have therefore stopped trading. Bondholders now wield legal means to restructure the portfolio. This comes after several external directors resigned because Goldman was not cooperating with the process. [CO+TASE]