Remember when that mysterious foreign buyer laid down $53.5 million to buy triplex penthouses on top of the newly renovated (and still not open) Plaza Hotel? Well, call that deal off. Late last Friday, that international mystery man revealed himself to be Russian financier Andrei Vavilov, who launched a hedge fund here this year. Lawyers for Vavilov filed a lawsuit under two corporate entities in New York State Supreme Court against El-Ad Properties, the company that has undergone what's become a turbulent makeover process, and Stribling, the brokerage firm.
According to the lawsuit, El-Ad advertised the penthouses to be "one of a kind" oases, perched on top of one of the city's most magnificent addresses. Enticed by advertisements, buyers for Vavilov plunked down $10.3 million in down payments for two units, 2009 and 2011, which they planned to convert into one giant palatial condo overlooking the park.
But every time they tried to check out their apartments — four times between September 2007 and January 2008, the lawsuit claims — they were denied access to their unit. According to the lawsuit, they "were advised that it was against El-Ad's policy to allow them access to the Penthouse."
Before closing, the buyer was finally able to check out the apartment and, according to the lawsuit, was appalled. "An attic-like space was found," according to a press release, "with ceiling heights far lower than promised, views were obstructed, window sizes dwarfed, square footage diminished, large unattractive drainage grates installed directly outside of certain windows, among other drastic changes not disclosed." The suit describes the deal as a "bait and switch" that was merely "a well-orchestrated scheme motivated by self-interest and greed." It also describes how the narrow windows in the penthouse "make the space more closely resemble an attic than a luxury penthouse living room." Vavilov's buyer wants his $10.3 million deposit back, plus damages (they estimate, somehow, that figure will be over $20 million).
Lawyers for El-Ad responded with a statement, calling the lawsuit "baseless" and accusing Vavilov of "failure to meet his legal obligation to close." They say the apartments were just as they were described in plans, and called the contract "iron-clad." "The Plaza is all but sold out and closings are proceeding as scheduled for some of the most highly regarded and sought after residences in the world," they added.