Grill and Schieber Successful in Representation of Sponsor-Developer

September 17, 2020 | Real Estate, Zoning & Land Use

David M. Grill and Evan R. Schieber successfully represented a sponsor-developer sued for fraud in connection with a condominium offering.

In Arisa 5 Franklin LLC v Broadway 371, LLC et al, Supreme Court, New York County, Index No. 154600/2018, the plaintiff, who was the purchaser of the commercial unit, claimed that the sponsor had materially misrepresented its ability to install a flue to operate its restaurant after the board of managers of the condominium rejected its proposed installation. We filed, and won, a motion to dismiss the action in its entirety against the sponsor.

In dismissing the case against our client, the Court determined that plaintiff was unable to substantiate fraud against the sponsor or establish any misstatements made by, or on the part of, the sponsor. In particular, the Court found that plaintiff was a sophisticated entity that could have incorporated its concerns in its purchase agreement. Also, the Court found that plaintiff’s contention that the sponsor knew that the board would reject its proposed plans was without merit since the sponsor did not control the board and was not a part of the decision to reject plaintiff’s plans. This decision is a major achievement for our developer client who faced significant exposure if the case proceeded.

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