Published reports say that the company is seeking a court order forcing Bear Stearns to sell the building to it for no more than $1.1 billion and also demanding damages. JPMorgan, which is in the process of acquiring Bear Stearns, as GlobeSt.com reported, plans to move part of its operations into the building, CEO Jamie Dimon said earlier this month. Bear Stearns did not return queries for comment by deadline. A JPMorgan spokesperson tells GlobeSt.com that "we believe the suit has no merit."
According to those reports, the lawsuit alleges that "at no time did Bear Stearns even attempt to honor its contractual duties to plaintiff, which would have required providing plaintiff with notice of the potential agreement with JPMorgan and engaging in negotiations with plaintiff relating to the purchase of the building."
Robin Levitt Topol, a real estate attorney with the New York City office of Butzel Long, who is not involved in the lawsuit, tells GlobeSt.com that when a land owner enters into a contract to lease land, there may be two kinds of offers included in the lease. The first is "right to first offer" and the second is "right to first refusal." She says that "it wouldn't be uncommon to have either option."
She explains that the "right to first offer" means that "if Bear Stearns is going to sell the building, they must come to the ground landlord and discuss the sale of the building first, where the land owner can then either take it or pass." She also notes that "right of first refusal differs in that it is a contractual right that would give Bear Stearns--for example--the option to find a ready, willing and able buyer, find out how much they want to purchase the building for, and then go to the land owner to see if they want to match it."
Karen Kozlowski, an attorney at Sullivan & Worcester LLP, who is also not involved in the lawsuit, tells GlobeSt.com that from what she can tell from published reports, it appears that 383 Madison LLC is claiming that they negotiated "the right of first offer to purchase the building--in essence, before Bear Stearns could sell the building to someone else, they would have to give 383 Madison LLC the opportunity to make an offer to purchase the building." She explains that 383 Madison LLC is alleging that this opportunity was never provided and if not, "it would be a violation of the ground lease--and a court could stop the sale of the building to JP Morgan [if] 383 Madison LLC was not given the opportunity to make an offer to purchase the building."
Kozlowski tells GlobeSt.com that "sales of property and buildings can be revoked and deemed null and void if such a violation of a lease occurred--so if 383 Madison is correct in alleging they have this right and were not given the opportunity to make an offer, this is a real issue."
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
