Kent Swig will reportedly face off in court with JPMorgan Chase tomorrow after suing the bank on Thursday, claiming that its plan to sell his office tower at 90 Broad Street violates a 2006 “last look” agreement that Mr. Swig had with the bank.
Mr. Swig, according to a report in The Real Deal, alleges that the bank went into contract to sell the 393,000-square-foot building to David Tawfik’s Princeton International Properties in violation of a provision in that 2006 agreement that gave him a right to make a counteroffer in the event of a third-party bid.
“If the notified party fails to exercise this ‘right of first offer,’ then – and only then – may the notifying party sell the property to an unaffiliated third party,” an attorney for Mr. Swig said in an affidavit, according to the report.
The New York Post first reported that Princeton International Properties was in contract to purchase the building, which was upgraded by Mr. Swig but heavily damaged by Hurricane Sandy, for $126 million, and in turn Mr. Swig filed the lawsuit and then won a temporary restraining order on Friday to put the sale on hold until the hearing.
Public records indicate that an entity controlled by Mr. Swig purchased the property in late 2005 for $90.56 million and Swig Equities is regarded as the owner and landlord of the building in real estate circles. Sources close to that deal confirmed with The Commercial Observer that Mr. Swig was the face of the acquisition team.
The Real Deal report, however, citing court documents, states that an entity controlled by a JPMorgan affiliate officially bought it from Rockrose, with JPMorgan contributing more than $90 million in loans to cover the deal.
While Mr. Swig alleges breach of contract and fiduciary duty, JPMorgan officials claimed in a letter last month they had the sole authority to sell the building without Mr. Swig’s approval, according to the court documents.
Douglas Harmon, Adam Spies and Joshua King of Eastdil Secured marketed the building, but they did not immediately respond to requests for comment. A Swig Equities spokesperson declined comment.