(Save the date: RealShare New York comes to the Grand Hyatt, New York, NY, October 9.)

NEW YORK CITY-DelShah Capital LLC announced earlier this month that the company took title at 55 Gansevoort St. from GHC NY Corp. after purchasing $30 million of debt on the building. But a competing investment company representing one of GHC’s property trustees is claiming that the title transfer should not have been authorized.

“They are claiming they took title to the building, and we are claiming the deed is invalid,” says Jeffrey Menaged of Orbis Capital Advisors, who tells GlobeSt.com that Orbis entered into a joint venture agreement in April 2012 with Robert Romanoff – one of the property trustees of GHC – to provide the money to pay off the loan on the 26,000-square-foot, five-story property in the Meatpacking District. “Eventually we would take over the building, save it from foreclosure and we were going to put money into the trust so the trust got a little something for their trouble instead of losing it to foreclosure,” he adds.

But according to documents obtained by GlobeSt.com, Robert’s father – Gerald Romanoff, the director of GHC NY Corp., signed off on the deed on July 20, and DelShah subsequently released a press statement about the deal on Aug. 6.

William F. Savino of Damon Morey, counsel on behalf of DelShah Capital, tells GlobeSt.com that the deed transfer stands because Gerald had the authority to make the decision based on a 2009 proxy by shareholders meeting agreement granting broad authority over the property. “When the proxy was given by the trust by Gerald, that’s like a power of attorney,” he says.

Unnamed sources say that GHC is 100% owned by another corporation called New Roads, which is overseen by Gerald and Sheryl Romanoff. In 2009, Gerald transferred all his shares to Sheryl and she set up two trusts, appointing Robert as one trustee, and Gerald Romanoff’s lawyer, Michael Zimmerman, as the second trustee.

At the time Sheryl Romanoff set up the trust, sources say she gave Gerald the power to run the trust for the rest of his life, and those trustees, Zimmerman and Robert Romanoff, gave a 25-year proxy to Gerry to vote the shares of New Roads. Proxies were executed at the same time that the trust was formed, the people say.

Michael Shah, principal of DelShah Capital, says the company intends to move forward with the repositioning of the asset at 55 Gansevoort into a boutique office building. “You don’t need an approval when the director and officer of a corporation wants to sell a building,” he says, noting that when the trusts were created, both trustees waived their voting rights. And according to a June 22nd court transcript, a request from the plaintiff to revoke the 2009 and 2010 proxies were denied by Judge Anil Singh.

But Orbis and Robert Romanoff are arguing that the proxies are based on Gerald's "self dealing" and personal benefit. According to a 2009 grantor trust agreement obtained by GlobeSt.com from Menaged, documents show that Gerald Romanoff, “has the power to control the investment of the trust funds either by directing investments or reinvestments, or [but] by vetoing proposed investments reinvestments. However, under no circumstance will Gerald have the right to exercise this aforementioned power in any manner to benefit himself individually, directly or indirectly, with respect to any portion of the trust’s income or principal.” 

Menaged says Orbis signed an order to show cause trying to get a restraining order against any transfer of the property, but the restraining order was denied by Judge Peter Sherwood on July 31 because the judge ruled “there was no danger of the property changing hands before it came through him.”

Menaged says Orbis has been asking for a mortgage payoff from DelShah for months and the company has not responded. In response, Shah says the company has not seen a complaint from Orbis that laid out the basis for what their position is. “Until we get that, we don’t really know; we would just be speculating,” he says.

Robert Romanoff declined to comment to GlobeSt.com about the revocation of the proxies, citing that it is “an ongoing legal matter.”