As Market Plummets Condo Boards Fight Back

David Goldsmith

All Powerful Moderator
Staff member
Let's see what their appetite for holding onto the most expensive unit in the building is vs trying to get more money. My question is: If The Department of Justice was willing to accept $18.25 million why was the asking price still $35 million and who knew they were that negotiable? In my mind leaves way too much room open for some kind of insider dealing. Now we get to see if a Condo Board can handle things better and if they can get out of their own way thinking they have to "protect values" in the building by getting an unrealistically high price.
Walker Tower condo board opposes heavily discounted sale of 1MBD unit
Residents at Chelsea building argue $18M sale will hurt property values
A condo board in Chelsea is fighting the U.S. Department of Justice over its decision to sell a forfeited penthouse at a 64 percent discount.

The 6,000-square-foot penthouse at the Walker Tower sold for $50.9 million in 2014, a downtown record. It went into contract last week for $18.25 million, according to the Wall Street Journal.

The tower’s board, angry about the steep discount, is now pushing back. The board has exercised its first right of refusal, and intends to buy the unit and relist it at a higher price, the Journal reports.

“The contract price can only be described as steeply distressed and unrealistic and one which could adversely affect the market value of other homes at Walker Tower,” said attorney David Berkey, who represents the condo board. “The board is acting in the best interests of all Walker Tower owners by exercising its right of first refusal.”

In response, The Department of Justice reportedly pointed to an earlier pleading in the case that said the board had agreed to give the government discretion to accept an offer.

“We’re all scratching our heads saying, ‘How did this happen?’” said resident Vicky Barron. “What we’re talking about is almost 70 percent discount. It’s almost like a sample sale. Walker Tower is not a sample sale.”

The penthouse was purchased in 2014 by an LLC linked to Abu Dhabi businessman Khadem Al Qubaisi. In taking control of the property, the government alleged the unit was bought with money stolen from Malaysia’s sovereign wealth fund, 1MDB.

Last month, a luxury condo that once belonged to Jho Low, a Malaysian financier central to the 1MBD scandal, sold for $7.6 million. Low had paid $13.8 million for the home in 2014.

David Goldsmith

All Powerful Moderator
Staff member
PS I think there's a reasonably good chance of a lawsuit here when the condo doesn't close on a timely basis.

John Walkup

Talking Manhattan on
Wow, this is an interesting story, thanks. It could have lasting repercussions as we see some covid fallout in the coming months.

David Goldsmith

All Powerful Moderator
Staff member
Judge rules against Condo Board.
Walker Tower board fights “low-ball” sale of 1MDB-linked penthouse
Judge ruled in favor of DOJ’s $18.25M sale to financial adviser Ron Vinder last week

In order to prevent the U.S. government from selling a 1MDB scandal-linked penthouse at a steep discount, the condo board of Chelsea’s Walker Tower recently sought to exercise its right of first refusal on a proposed sale.
Unfortunately for them, a federal judge has decided that such a right no longer exists.
Judge Dale Fischer wrote in a decision last Monday that a May consent judgment wiped out the board’s right of first refusal — a ruling the board has already appealed. The judge made “a fundamental error” in finding that the board had waived its right of first refusal, the board said in a statement. “No such waiver was ever granted, nor should one be implied.”
The board also claims that the DOJ let the apartment “deteriorate,” left “its common charges unpaid for several years” and “ignored multiple efforts to sell the penthouse at a fair premium.”
“More importantly, the board is frustrated by the continued missteps the Justice Department has made in its handling of this incredible penthouse asset, worth tens of millions of dollars in recovery to victims of the 1MDB scandal,” the statement continues.

Although the May consent judgment does not explicitly mention the right of first refusal, it states broadly that “all right, title, and interest” of the board in the condo unit “shall be forfeited to the United States.” While the parties spent a lot of time debating whether the right of first refusal was attached to the unit, the judge found that this distinction “does not make any difference.”

“The ROFR is a right (or interest) in the Property, and the Judgment forfeits all of those rights,” she wrote.
The purported “low-ball” offer of $18.25 million comes from Ron Vinder, a financial advisor with Morgan Stanley Private Wealth Management. The proposed purchaser’s identity has not been previously reported. Vinder did not respond to a request for comment.

The unit at 212 West 18th Street previously sold for $50.9 million in 2014, setting a record for the Downtown market. The buyer was an LLC linked to Abu Dhabi businessman Khadem Al Qubaisi, and the Justice Department seized the property in 2016, alleging that the unit was bought with money stolen from Malaysia’s sovereign wealth fund, 1MDB.

Al-Qubaisi, who once headed Abu Dhabi’s International Petroleum Investment Company, received a 15-year prison sentence in the emirate last year.
The asking price on the full-floor, five-bedroom penthouse was most recently cut to $35 million last January. According to court filings, the highest offer on the unit as of March was $23 million, which was then reduced to $18 million “due to all of the uncertainty in the market and frankly in the world” caused by coronavirus, according to an email from the buyer’s agent.

The condo board’s plan, if it is able to exercise its right of first refusal, is to sell the unit to itself for the same price as the current offer and then to relist it for more, the Wall Street Journal previously reported.
In a declaration included in court filings, Vinder says that the condo board president at one point offered to “cease efforts to find another purchaser” if he were willing to pay an extra $1 million for the unit.

In its statement, the board says that its preferred buyer entity offered an additional $2.5 million for the unit, which “would expressly have been added to the compensation for 1MBD victims.” The Justice Department’s rejection of this offer, they say, further reflects that “the government is not acting in the best interests of the building or of victims of the fraud.”

Representatives for the Justice Department declined to comment. In court filings, the DOJ argues that the board’s move would force the U.S. government to breach the Vinder contract and potentially subject itself to liability. It also alleges that the board is seeking to extract a $2.5 million “side-payment” by exercising its right of first refusal.

The past month has been full of major developments in the 1MDB case, as former Malaysian prime minister Najib Razak was sentenced to up to 12 years in prison in connection with the scandal, while Goldman Sachs agreed to a $3.9 billion settlement with the Malaysian government.

Meanwhile, the scheme’s mastermind, Jho Low, may now be hiding in the Chinese territory of Macau, according to Malaysian police. Previous speculation indicated that he might be hiding in the United Arab Emirates or mainland China.

David Goldsmith

All Powerful Moderator
Staff member
Condo board can’t stop sale of 1MDB penthouse at $33M discount
Walker Tower unit tied to Malaysian scandal trades at 64 percent below 2014 price

The buyer of a scandal-tinged penthouse at the Walker Tower in Manhattan might not receive the sunniest of receptions on move-in day.
The Chelsea building’s condo board tried to block the sale of the full-floor unit by exercising its right of first refusal. The board argued that the $18.25 million sale price brokered by the Department of Justice — which seized the unit as part of the 1MDB corruption probe — would devalue their homes. The unit last traded in 2014 for $50.9 million, a Downtown record at the time.

But the board could not stop the sale: The deal closed Aug. 21, according to property records. The buyer was identified as Gotham Tower LLC. The entity’s signing member was Ron Vinder, a financial adviser with Morgan Stanley Private Wealth Management. Vinder declined to comment, as did Core Real Estate, which represented the buyer and seller.

A source familiar with the matter said the buyer plans to live in the nearly 6,000 square-foot apartment atop the Art Deco building at 212 West 18th Street, which Michael Stern’s JDS Development converted to condos nearly a decade ago.
Despite the closing, condo board members plan to fight on. Lawyer David Berkey said they were appealing an earlier court decision that found the board did not have a right of first refusal. (The ruling paved the way for the sale to close.) If successful, the appeal could allow the board to void the sale and look for a higher bidder, Berkey said.

The Department of Justice did not respond to requests for comment.
The dispute has roots in a political scandal that went all the way to the top of the Malaysian government and ensnared several luxury properties in New York.

The Walker Tower penthouse was linked to Abu Dhabi businessman Khadem al-Qubaisi, whom federal prosecutors accused of paying for the property using money misappropriated from the Malaysian state fund, 1Malaysia Development Bhd., also known as 1MDB.

(Separately, the Department of Justice announced Wednesday it had reached a settlement with “The Wolf of Wall Street” producer Riza Aziz to give up his claims on more than $60 million worth of assets, including three properties in New York, Los Angeles and London, tied to the 1MDB scandal.)

The ownership structure for the penthouse was layered: al-Qubaisi signed a purchase agreement for the unit in 2013 and later assigned the contract to an LLC managed by businessman Neil Moffitt, according to prosecutors.
In 2015, the property was listed for $70 million. When no buyers came forward, the asking price was dropped to $55 million.

In 2016, authorities moved to seize the property, but those plans were put on hold, pending a criminal investigation.
Last January, with the luxury market dragging, the asking price was reduced to $35 million. That same year al-Qubaisi was sentenced to 15 years in prison.

The Department of Justice filed a forfeiture lawsuit in California seeking to take ownership of the penthouse and handle the sale. Meanwhile, the board had a lien dating back to 2016 for unpaid common charges, which, combined with other fees and charges, amounted to hundreds of thousands of dollars.

In a consent judgment this May — an agreement reached by both parties — federal Judge Dale Susan Fischer determined that “all right, title, and interest” the board had in the property would be forfeited to the government. The judge also held that the fees owed to the board would be paid out from the proceeds of the sale.

But when the board learned of the $18.25 million contract, it sought to exercise its first right of refusal, which, under the building’s bylaws, meant getting consent from a majority of residents in the building. “The contract price can only be described as steeply distressed and unrealistic and one which could adversely affect the market value of other homes at Walker Tower,” Berkey told the Wall Street Journal.

The board started soliciting offers and found a person who would pay $2.5 million more for the unit, then relist it at a higher price, according to court records. (It had been reported that the board planned to buy and relist it, but when asked whether the new buyer was someone in the building, Berkey said he was not at liberty to comment.)

In late July, after the dispute went back to court, Judge Fischer rejected the board’s argument, finding that the consent judgment had wiped out its right of first refusal.
Running out of options, the board filed a last-ditch application to the federal court, asking for the sale to be stayed until the appeal was decided.

The court refused.

David Goldsmith

All Powerful Moderator
Staff member

Forfeited profits: Why the feds chronically undersell seized property​

Analysis shows DOJ flipped seized 1MDB assets for 41% less, on average, than fraudsters paid for them​

The image of a U.S. Marshal giving a tour of Bernie Madoff’s seized Montauk beach house, gun bulging beneath a black windbreaker, is one that’s stayed with appraiser Jonathan Miller.
“He’s a big dude,” Miller said of the 2009 video. “His arm sweeps across the room: ‘Notice the understated elegance.’”

Times have since changed for the Marshals Service, the agency tasked with the seizure and sale of properties obtained by convicted criminals using their ill-gotten gains.

Today, Marshals seldom set foot inside seized properties. A federal contract awarded in 2017 entrusts Colliers with overseeing the sale of forfeited real estate, and the Justice Department sends press releases about its big wins.
This summer, there was a lot to celebrate. In August, the DOJ repatriated $452 million misappropriated from a taxpayer-funded Malaysian development vehicle, bringing the total the DOJ has returned to Malaysia to a staggering $1.2 billion.

Known as 1Malaysia Development Berhad, the fund once had $8 billion to invest in big deals that would bring hefty returns to the people of Malaysia. Instead, officials tasked with managing 1MDB treated it as their personal piggy bank, pilfering an estimated $4.5 billion between 2009 and 2015. Those involved included Malaysia’s then-Prime Minister Najib Razak, his step-son Riza Aziz, Emirati businessman Khadem al-Qubaisi and enigmatic dealmaker Jho Low, the alleged mastermind.

Money diverted from 1MDB funded the production of Martin Scorsese’s “The Wolf of Wall Street,” Low’s extravagant birthday parties, diamond jewelry for Razak’s wife, a reelection campaign, works by Monet and Van Gogh and luxury real estate in New York City and Los Angeles — though that list is far from exhaustive.

The case was a dream for the Justice Department. Splashy and alluring, it gripped headlines and yielded a mostly happy ending — the feds seized the assets and liquidated them to repatriate cash. But the picture loses its rosy haze when the government’s handling of the trophy real estate implicated in the scheme is put under closer scrutiny.

The nine U.S. properties seized by feds in the 1MDB probe were bought with about $664.5 million in stolen funds. Almost all were luxury homes, save for a majority stake in the Park Lane Hotel in New York and the Viceroy L’Ermitage Hotel in Beverly Hills. An analysis of court and property records show that, since 2018, the government has sold eight of these properties for 41 percent less on average than fraudsters paid for them (the ninth, a condo, is listed for sale).

Of the six homes the feds seized and sold, only one was sold for more than the fraudsters paid for it. That was Low’s Beverly Hills mansion, which he bought for $17.5 million in 2010. Low transferred the ownership to Aziz, who then spent at least $22.5 million renovating the property, according to reports. It was sold by the Marshals for $19 million in November 2019 and was resold for $27.4 million this year.

Based on an analysis of completed sales, the Marshals sold homes tied to the scandal for 48 percent less, on average, than Low and his associates spent purchasing and renovating them.

The Marshals’ best deal was the auction of the luxurious Viceroy L’Ermitage Hotel for $100 million in October 2020, 22 percent more than the $82 million Low spent to buy and renovate it.
The most egregious loss was the sale of a penthouse at Walker Tower in Manhattan. Entities tied to Low bought the unit for $50.9 million in 2014. The Marshals sold it last year for $18.25 million, a 64 percent discount.

“They don’t care about the market,” said Ryan Serhant, the celebrity broker who represented the buyer of Low’s forfeited condo at 80 Columbus Circle. “They care about liquidating the assets as quickly as possible for what the market can bear so they can repay victims as quickly as possible. They’re not here to set comps.”

Serhant’s client purchased the 4,822-square-foot unit for $23 million in May last year, about a quarter less than the $30.55 million Low paid for it in 2011.
Stefan Cassella, a former chief of the Asset Forfeiture and Money Laundering division in the U.S. Attorney’s office in Maryland, now runs a forfeiture consultancy business and reviewed TRD’s analysis of the sales.

He said the losses could be attributed to a down market, deterioration, liens on the properties or the fraudsters dramatically overpaying.
“The only way to know what factors were at work in this case would be to ask the person in the Marshals Service who handled these particular sales,” he said in an email. “I can only say that none of this is unusual.”

The Marshals Service and a representative for the DOJ declined to comment.

Seizing the moment​

Civil forfeiture was nearly abolished in the 18th century after the Americans ousted the British, but a provision remained allowing the newly formed U.S. government to seize ships that didn’t pay customs duties. That clause in maritime law is the basis for federal forfeitures today.

Real estate seizures didn’t come into regular use until the 1980s, when the Reagan administration frequently wielded them to wage the War on Drugs.
“[Reagan] dusted off forfeiture and RICO and decided this would be good to use against organized crime,” said Steven L. Kessler, a prominent foreclosure defense attorney. “Very few people had an objection to that.”

Despite a history of abuses, prosecutors argue that civil forfeiture is one of the few ways victims can receive restitution when criminal prosecution is not possible. In the case of 1MDB, the $1.2 billion in stolen funds has been recovered through 42 civil forfeiture actions filed in federal court.
But under-selling forfeited real estate has long been a problem for the Marshals Service.

In 2010, Leonard Briskman, a top official at the agency, was accused of selling assets without competitive bidding and operating a side business to dispose of distressed real estate to his “business contacts.” A subsequent investigation corroborated the substance of the allegations and he was reassigned before retiring in 2015.

In an interview, Briskman said he was ultimately cleared of the charges and returned to “pretty much the same work.” He said he “always tried to get the highest and best price that I possibly could,” but said the constraints of the job could frustrate the effort.
Case in point: the seizure of the notorious mob-run Las Vegas strip club Crazy Horse Too in 2007. The club, founded by Tony Albanese — whose severed head was discovered in a California desert in 1981 — was being run by Rick Rizzolo when the FBI began investigating it after multiple severe beatings of patrons. One man died in the desert behind the club after a fight in 1995.

Briskman said they’d found a buyer ready to pay $35 million for the club on the condition that the purchase came with a gambling and liquor license. In order to get the license, the club would have to open for one hour. That was a deal breaker for the agency — the government would not open and operate a strip club, even for an hour.

“We walked away from $35 million to nothing,” he said. “Was it a mistake? Well, personally I thought it was a mistake, but I was a government employee so I abided by what the government wanted.”
In 2018, Sen. Chuck Grassley released a lengthy memo documenting a culture of misconduct among the agency’s top officials. The Marshals’ asset forfeiture division was accused of wasteful spending in connection with a pricey office renovation and a rarely-used training facility.

The memo followed a 2016 report into improper hiring practices and reprisals against whistleblowers, in which it was revealed the DOJ had suggested the Marshals’ handling of real property be turned over to the Treasury Department. The rationale was that the Treasury’s forfeiture program, which contracts out management and sales, generated “far fewer complaints” from DOJ prosecutors.

Jason Wojdylo, who was the chief inspector of asset forfeiture for the Marshals until he retired in April, was one of the internal whistleblowers cited in both the 2016 and 2018 reports.
He said the general policy was to sell properties for a minimum of 85 percent of the appraised value, often determined via drive-by because the Marshals can’t gain entry to properties without a court order. That means certain unexpected surprises inside could be discovered much later. In one such case, it was only after entering a home that Wojdylo realized its pipes weren’t connected to the sewage system.
“Every day an asset sits in our custody, it costs us money,” he said. “But we’re not just giving it away.”

Lapse of luxury​

Among the biggest mysteries of the 1MDB case is how the U.S. Marshals managed to get just $18.25 million for a sprawling, 6,000-square-foot, five-bedroom penthouse in Tribeca. When it was bought for $51 million in 2014 by 1MDB co-conspirator Khadem al-Qubaisi, it was the most expensive apartment ever sold in downtown Manhattan.
The government first moved to seize the property through civil forfeiture in 2016 but paused the action to complete a criminal investigation. Meanwhile, al-Qubaisi’s wife tried to block the seizure, claiming ownership on behalf of their four children as innocent third-parties.
The property appeared on the market as early as 2017, with listing agents Emily Beare and Shaun Osher of CORE Real Estate, asking $45 million. In early 2019, the price dropped to $35 million.
In July 2019, an agreement was reached between the family and government to sell the condo despite the pending forfeiture case. Unpaid common charges were piling up to the tune of $250,000 a year and both parties wanted to prevent the penthouse’s condition from deteriorating.
Over the next six months, the listing took a turn for the bizarre. Three potential buyers came forward, but each offer was lower than the one before, according to DOJ lawyer Barbara Levy, citing reports from CORE. The listing agents attributed that to cockroach sightings, a plumbing leak and an odor from the apartment’s six toilets, according to the lawyer’s March 2020 affidavit. The condo was in such a state of disrepair that “one prospective [buyer] had a difficult time staying inside.”
In March, the parties were considering an offer made in November. But as the arrival of Covid roiled markets, the bidder reduced the offer by $2 million and gave the parties one week to sign. In a court declaration, Beare said the offer was for $23 million.
“The current offer appears to be the highest available reasonable offer in light of current market conditions,” Levy wrote.
The Walker Tower’s condo board approved the $23 million offer, its lawyer told the court.
The al-Qubaisi family objected, claiming it was “unreasonably low” and “inconsistent with the offer history,” filings show. Court documents show there had been at least one $30 million offer.
Compass broker Michael Graves submitted a $20 million all-cash, no-contingency offer to the listing agents in March 2020 but was told a higher offer was being entertained, he said in an interview. His account was corroborated with documentation.
The judge ultimately gave the government permission to sell the unit for $23 million, “or any offer that is within 25 percent of the value” — between $17.25 million and $28.75 million. But the $23 million buyer balked and revised his offer to $18 million. Around the same time, Beare received a second offer for $18.25 million. The Marshals went with the higher of the two, executing the contract in May.
Graves was shocked when the final sales price became public. “I was stunned that we were unable to make any traction,” he said. “My client was ready and able to close immediately.”
The condo board tried to block the sale by exercising its first right of refusal and even offered to buy the unit from the government. But the judge agreed with the government and the sale proceeded, closing in August 2020. The al-Qubaisis were awarded a sum of $870,000 and their claim to the property was wiped out.
A year later, questions remain.
“I’m just puzzled,” said Compass broker Vickey Barron, who lives at Walker Tower and sells in the building. “I know there were other people willing to step up and pay more. Why they didn’t have the opportunity, I don't know.”
Levy did not respond to a request for comment nor did CORE’s Beare and Osher.

Competing priorities​

Though the disappointing sale at Walker Tower can be seen as emblematic of the problems plaguing New York’s luxury market during the onset of the pandemic, some argue the Marshals faced stacked odds from the outset.
“When someone wildly overpays for a property, it’s doomed from the day they close,” said Miller, the appraiser.
Wojdylo, who did not work on the 1MDB case, also pushed back on any suggestion that losses were the result of agency mismanagement.
“Nobody's being lazy and saying, ‘We don’t care about victims, just take whatever we can get for it,’” he said. “I don’t believe that there is anybody sitting in an office in Washington who is making decisions without considering their responsibility to victims.”
The recent case of Paul Manafort, the chairman of Donald Trump’s 2016 presidential campaign, illustrates his point. In 2018, Manafort agreed to forfeit five properties spread throughout New York City and the Hamptons to repay an $11 million monetary judgement after he was convicted on bank fraud and tax charges.
The government abandoned forfeiture actions after Trump pardoned Manafort in January, though not before selling two of the homes at a loss. (Wojdylo did not work on the case.)
But the Marshals were destined to fail from the start. Manafort had nearly $23 million in mortgages on the properties and had accrued so much debt that the homes would have had to sell at absurd premiums to make a profit.
A source who used to work in law enforcement said the agency typically wouldn’t go forward unless it stood to make at least $50,000 on a sale, but the person noted that in a high-profile case with a political figure like Manafort, refusing to seize his homes would look “like the government is not doing its job.”
“Forfeiture is not about profit. It’s not about money,” Wojdylo explained. “It’s about law enforcement.”

David Goldsmith

All Powerful Moderator
Staff member
The drama at Walker Tower continues. Didn't they already lose their challenge to this sale? Hopefully we will hear more about the process, higher offers being/not being presented, etc. but I wouldn't count on it since the DOJ isn't included in the suit.

Condo board looks to evict buyer of heavily discounted 1MDB penthouse​

Latest legal dispute comes a year after U.S. Marshals sold the Walker Tower penthouse at a 64% discount​

The penthouse at Walker Tower — seized by federal agents five years ago in connection with an international money laundering scandal — is once again the center of controversy.
The condo board of the luxury building at 212 West 18th Street is asking a New York Supreme Court judge to eject owner Ron Vinder, a private wealth manager at Morgan Stanley, and award the board immediate possession of his unit after accusing the government of bungling its sale last summer.

Central to the board’s complaint is the fact that the U.S. Marshals Service sold the penthouse to Vinder at a 64 percent discount off its previous purchase price. The board argues that it would never have approved such a low sale and that the transaction violated the building’s bylaws, which gives the board first right of refusal on any sale.

“The board is simply exercising its fiduciary responsibility to preserve the value of residences throughout Walker Tower,” said the board’s lawyer, David Berkey of Gallet Dreyer & Berkey, in a statement. He called the Marshals’ sale of the penthouse “illegal.”
Vinder’s lawyer, Marc Kasowitz, sees it very differently. He called the complaint “completely meritless” and accused the board of trying to overturn the sale out of retaliation after “unsuccessfully attempting to extort” his client.

The dispute is the latest episode surrounding the sprawling penthouse. The trophy apartment first gained notoriety in 2016, when U.S. Marshals seized it from its first owner, Emirati businessman Khadem al-Qubaisi, as part of a probe into U.S. assets purchased with funds stolen from a taxpayer-funded Malaysian investment vehicle known as 1Malaysia Development Berhad, or 1MDB.

Al-Qubaisi had purchased the penthouse for $50.9 million in 2014, a then-record sum for a downtown Manhattan residence. When the government sold it last year, it went for $18.25 million.
The jaw-dropping 64 percent discount shocked residents and market insiders, raising questions about the handling of the sale by the government and the unit’s listing agents, Emily Beare and Shaun Osher of CORE Real Estate. Notably, the condo board said that higher offers for the unit existed. Compass agent Michael Graves told The Real Deal earlier this month that he made a $20 million all-cash offer for the unit in March 2020.

Officially, the pandemic’s devastating effect on the city’s residential market as well as the unit’s deterioration — evidenced by cockroach sightings and a lingering odor — were cited as reasons for the low price, according to court documents.

Last summer, Walker Tower’s condo board tried to block the sale in federal court by exercising its right of first refusal, but the government successfully argued that the board signed away its rights months earlier, when it gave consent for the government to unilaterally sell the unit.

Though the board appealed the decision, by the time the case was heard by appellate judges in July, the sale had been closed for nearly a year.
“You didn’t get a stay of that [sale] and the transaction is closed,” said Paul Watford, an appellate judge on the panel hearing the case, which ultimately dismissed the appeal. “What can we do?”

The appellate judges concluded in July that any relief must be sought in state court, which provided an opening for the condo board to try again to undo the sale, according to Berkey, the board’s lawyer.
Later that month, the condo board passed resolutions declaring the government’s sale void and agreeing to pursue legal action to eject Vinder and his family from the penthouse. Berkey filed the board’s complaint with the state Supreme Court and the board stopped accepting Vinder’s monthly common charge payments, though it’s now seeking a court order to resume collection.

“Any board would be expected to take the same kind of action,” said Allan Ripp, a spokesperson for the condo board. “It’s not personal. It has nothing to do with this buyer. It’s really the process that was done improperly.”
Ripp said the responsibility lies with the government, which did not accept other bids at “substantially higher prices.”

“There was no reason for a fire sale of this trophy apartment,” Ripp continued. “The government has explaining to do.”
But neither the Marshals service nor the Justice Department is a party to the board’s lawsuit against Vinder, which his lawyer, Kasowitz, argues is “what can only be described as an ill-conceived, if not frivolous attempt” to avoid federal court.

“It is just beyond credibility that this board in these circumstances is continuing to try to undo the transaction,” said Kasowitz, who filed a motion to dismiss the case last month. “We can’t help but believe this is some personal effort on behalf of some members of the board to harass Mr. Vinder but that effort will not succeed.”

In his motion, Kasowitz accused the condo board of attempting to extort $1 million from Vinder to make up for the transfer tax the building would have received if the penthouse was sold at a higher price.
Ripp said the board has “zero animus” against Vinder and denied the accusations of harassment and extortion.

As the litigation continues, Walker Tower’s board is raising common charges. Last fall, the monthly dues went up 5 percent. This year, owners were informed fees would be rising a further 3.75 percent, according to documents viewed by TRD. The board denied the increases were connected to the penthouse dispute.
DOJ spokesperson Joshua Stueve declined to comment. However, when the government was still involved in the case back in July, DOJ attorney Barbara Levy told federal appellate judges that the board’s challenging of a closed transaction could have a chilling effect on forfeiture sales.

“It would be in derogation of public policy if finality were not achieved within the confines of the forfeiture process,” she said.

David Goldsmith

All Powerful Moderator
Staff member
And they lost again. Another case of a Board claiming they are looking out for owner's best interests while wasting hundreds of thousands of dollars on attorney's fees on unwinnable cases (often because those same attorneys are telling them they can do whatever they want and call it "business judgement).
Condo board fails to evict buyer of discounted 1MDB penthouse

The condo board of the luxury Walker Tower has suffered another defeat in its attempt to eject the owner of the building’s penthouse.

A New York Supreme Court judge dismissed the claims of the building’s condo board last week, Crain’s reported. The judge threw out the complaint because the condo board failed to put the government — which initially seized the penthouse — as a defendant.

The controversy surrounding the penthouse at 212 West 18th Street began in 2016, when U.S. Marshals seized it from its owner, Emirati businessman Khadem al-Qubaisi. The forfeiture came about as part of a probe into U.S. assets purchased with funds stolen from a taxpayer-funded Malaysian investment vehicle known as 1Malaysia Development Berhad, or 1MDB.

Al-Qubaisi set a downtown Manhattan record at the time with his $50.9 million purchase of the unit in 2014. The government sold it in 2020 for $18.2 million, a stunning 64 percent discount.

The condo board quickly expressed frustration with the deal, claiming there were higher offers for the unit. According to court documents, the pandemic and deterioration of the unit were cited as reasons for the low price.

Shortly after the sale, however, Walker Tower’s condo board attempted to block the transaction in federal court by exercising its right of first refusal. The government successfully argued the board signed away its rights earlier when it gave consent for the government to unilaterally sell the penthouse.

Condo board looks to evict buyer of heavily discounted 1MDB penthouse
Forfeited profits: Why the feds chronically undersell seized property
Walker Tower board fights “low-ball” sale of 1MDB-linked penthouse

The board appealed the decision. Appellate judges concluded in July that relief must be sought in state court, seemingly giving the condo board another opportunity to undo the sale.

That same month, the condo board passed resolutions declaring the sale void and agreed to pursue legal action to remove the buyer, Morgan Stanley private wealth manager Ron Vinder, from the unit. A complaint was filed with the state Supreme Court and the board ceased accepting Vinder’s monthly common charge payments.

A lawyer for Vinder argued that omitting the Marshals Service and the Justice Department from the latest lawsuit was an “ill-conceived” attempt to avoid federal court. The lawyer also accused the condo board of trying to extort $1 million from Vinder to make up for the transfer tax it would have received if the penthouse sold at a higher price; the board denied that accusation.

In addition to avoiding eviction, Vinder was also awarded costs and attorney fees.