NEW YORK CITY—New York REIT has received a favorable ruling in a suit initiated against it by RXR Realty. RXR alleged that it suffered “lost profits" in connection with NYRT's purchase of Worldwide Plaza last October.
NYRT has purchased an 48.9% equity interest in the property for $220 million. The seller, WWP Sponsor—which is controlled by a joint venture consisting of George Comfort & Sons, RCG Longview, and DRA Advisors—retained the remaining 51.1% equity interest.
RXR had been in contract to purchase a 48.9% stake in Worldwide Plaza from WWP in 2013 but had not closed the acquisition. NYRT then agreed to purchase such interest in Worldwide Plaza, and RXR immediately sued to enjoin the sale. At the time, the asset is 91% leased to a number of large credit tenants, including Nomura Holding America and Cravath, Swaine & Moore.
Justice Shirley Kornreich of the Supreme Court of the State of New York denied RXR's motion for an injunction in October 2013, and the appellate division, first department then denied RXR's application for an emergency stay of the sale.
RXR then filed an amended complaint against the seller of Worldwide Plaza and NYRT for disgorgement [the forced giving up of profits obtained by illegal or unethical acts] of an alleged $200 million profit NYRT obtained on the deal. The seller, WWP Sponsor—which is controlled by a joint venture consisting of George Comfort & Sons, RCG Longview, and DRA Advisors—and NYRT filed motions to dismiss the amended complaint earlier this year.
Justice Kornreich has dismissed all of RXR's claims against the seller and dismissed RXR's disgorgement claims against NYRT, permitting only a limited claim against NYRT for RXR's cost of producing due diligence-related material to proceed.
"We are pleased by the court's ruling as we continue to focus on actively acquiring other significant Manhattan properties, including the Twitter building which is scheduled to close in the coming days," says Michael A. Happel, president of NYRT.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
