Joe Chetrit Sues Former Ownership Group at Chelsea Hotel
Al Barbarino March 13, 2013, 3:18 p.m.
As if the image of a potentially shirtless Justin Bieber stumbling into Chelsea wasn’t enough for Joe Chetrit to handle, the real estate mogul has now filed a lawsuit claiming he was duped out of millions by the Chelsea Hotel’s former owners.
Mr. Chetrit filed a lawsuit in the State Supreme Court alleging that the former ownership group “deliberately lied” about the status of tenants and deceived him into believing that valuable artwork – and a “closet” – on the premises was included as part of his purchase of the property in 2011, Curbed reported.
“Had plaintiff known of defendants’ fraud regarding the artwork and apartment units, plaintiff never would have paid $78.5 million for the purchase of the Chelsea Hotel,” the lawsuit states, calling the actions “outrageous, fraudulent, shocking to the consequence and deliberate.”
After ownership changed hands, artists and their beneficiaries – including the widow of Arthur Alan Weinstein, the Larry Rivers Foundation and artist Philip Taaffe himself – knocked on Mr. Chetrit’s door asking for the artwork back, with Mr. Weinstein’s widow alone claiming 22 pieces worth up to $500,000, the lawsuit alleges.
Mr. Chetrit is asking for $2.15 million for the artwork, or “non-existent assets,” and an additional $2 million in punitive damages because of the “defendants’ fraudulent misrepresentation and concealment.”
The lawsuit also states that ownership misrepresented tenants and their rents, and that “a closet on the hotel’s first floor” that Mr. Chetrit believed to be part of the deal is in fact owned by a tenant, according to Curbed.
Once a mecca for bohemians, artists, writers and musicians, from Bob Dylan to Charles Bukowski to Iggy Pop, the famed “hotel” is undergoing a transformation, but to the chagrin of some, as Mr. Chetrit’s plans to redevelop the property into an upscale hotel brings an onslaught of troubles.