The investment group, which ultimately came to include Messrs. Sutton, Adjmi and Cayre, offered to pay $130 million for the property, according to the suit. Starwood accepted.
And then the defendants asked Mr. Chera to leave, offering him a $2.5 million exit fee, he claims in his lawsuit. He agreed. But, he says, they never paid him. Meanwhile, according to the purchase agreement, C&C had to make a $15 million deposit by Aug. 11. But, says the suit, “Defendants failed to deposit the funds as they had promised and as they were obligated to do.”
Why would they do such things? Enter Machiavelli.
“Defendants understood that they could learn valuable information about Starwood, Starwood’s pressure points, and, ultimately, how to leverage the best deal for themselves with Starwood, if they were on the inside of the joint venture with Plaintiff,” Mr. Chera’s suit claims. “They also knew that they could benefit tremendously from Plaintiff’s industry expertise as well as from the fruits of Plaintiff’s labor.”
No response has yet been filed in that case.
But in a response of another sort, on Oct. 6, the Jackson Group LLC filed a countersuit against Crown Acquisitions, making startlingly similar allegations: to wit, that Crown violated the terms of the June 10 agreement, which supposedly gave all decision-making authority to the Jackson Group, and that Mr. Chera cut Jackson Group’s principals out of the deal. They’re seeking at least $30 million in damages and an injunction against the closing of the purchase.
They didn’t get that last demand. Mr. Chera, partnering with the Feil Organization and Lloyd Goldman, closed on the purchase of the retail condominiums on Nov. 4 for $117 million. A valedictory press release announcing its closure was released the following day.