New York developers Aby Rosen and David Edelstein are in a high-noon standoff over a proposed buyout deal for the W South Beach — with a maturing loan raising the stakes.
Entities controlled by Edelstein, principal of Tricap (formerly Tristar Capital), and Rosen, co-founder and principal of RFR Realty, recently filed dueling lawsuits against each other in Miami-Dade Circuit Court and New York Supreme Court.
The W South Beach co-owners are in a hostile stalemate over Tricap’s $200 million proposal to buy RFR’s interest in the luxury hotel at 2201 Collins Avenue in Miami Beach.
A Tricap spokesperson said Edelstein’s firm sought legal action in Miami-Dade to “enforce a contractually agreed-to process for buying or selling the hotel to each other,” and that RFR followed up with its own complaint in New York, “apparently seeking to avoid litigating the matter in Florida.”
Last week, Tricap’s entity sued RFR’s entity in Miami-Dade, seeking a court order to enforce an agreement the partners allegedly reached in October. The suit also seeks to require RFR to either agree to extend a $157.4 million Citibank mortgage due on Jan. 25, or come up with its share of the funds to pay it off.
RFR has “repeatedly refused” to cooperate with Tricap on the loan issue as a tactic to obtain a more favorable buyout at “an inflated price,” the Miami-Dade lawsuit states. If Tricap refused, RFR threatened to “burn the house down,” the complaint also states.
On Monday, RFR’s entity sued Tricap’s entity in New York, accusing its partner of using the buyout negotiations as a stall tactic to extend the loan’s maturity date, which was originally set to expire in August of last year.
RFR claims it was “ostensibly negotiating in good faith,” while Tricap was “merely stringing [RFR] along in an effort to extract additional concessions,” the New York lawsuit states. Tricap walked away from Tricap’s $200 million offer last month, RFR also alleges.
In 2009, the New York firms co-developed the 395-room W hotel.
Source: The Real Deal