By: Marty Raminoff
A Manhattan condo board was unsuccessful in its desperate attempts to preserve the value of its property by appealing the court to reverse the devalued sale of a penthouse seized and sold by the federal government.
As reported by Crain’s NY, the penthouse condominium apartment at the 23-story Walker Tower in Chelsea was seized by the U.S. Department of Justice in 2016, in a settlement to recover money from a Malaysian money-laundering scheme. The extravagant penthouse belonged to Middle Eastern businessman Khadem al-Qubaisi, who purchased it in 2104, as per The Wall Street Journal. Al-Qubaisi was subsequently sentenced to jail in the United Arab Emirates for financial crimes related to the Malaysian sovereign wealth fund.
The apartment was swiftly sold to Morgan Stanley high-asset wealth manager, Ron Vinder, through an LLC entitled Gotham Tower, for $18.3 million in the fall of 2020. The condo board, however, demanded that it had the right of first refusal on the property. As per Crain’s, the board argued that its bylaws specify that the board can make an offer on an apartment for sale in the building before anyone else. The board wanted to be the one to purchase the underpriced unit from the government, and then to resell it for a higher price. The board has an “obligation to preserve the value of the building,” said the board’s attorney, David Kettel, in court papers. “A sale that is made at less than 40% of market value will also devalue the units owned by other [Walker Tower] residents by tens of millions of dollars,” Kettel added.
The board, however, was too late, and the sale had already gone through. A panel of federal appellate judges ruled that sale to Vinder was already complete, and could not be undone. The board also tried to get the District Court to stay the sale on the day before it closed, but that too was denied. The panel said that any relief must now be obtained through state court.
The Art-Deco style skyscraper at 212 West 18th Street, designed by famed architect Ralph Walker, was bought by JDS Development, led by Michael Stern, which converted the eighth through 23rd floors of the building into 55 luxury condos in 2014. The lower part of the building is still office space occupied by Verizon.
Representatives for the Walker Tower Condo board, and the Department of Justice did not immediately reply to Crain’s requests for comment. Khadem al-Qubaisi could also not be reached for comment.
