Rotem Rosen Responds to Sapir Suit with Suit of His Own
Rotem Rosen has sued Alex Sapir in federal court, claiming that Sapir is in default over a $75 million buyout agreement, according to court records filed Tuesday.
The suit is the latest in a volley of lawsuits between the two former brothers-in-law, and comes a week after Sapir sued Rosen for $100 million, claiming that Rosen, along with his brother Omer Rosen, stole company secrets and wrongfully filed a claim against Sapir’s father’s estate, as Commercial Observer recently reported.
Rosen, who was previously married to Alex Sapir’s sister, worked for the Sapir Organization until 2017 and partnered with Sapir on a variety of projects, before falling out with each other.
In the latest suit, Rosen claims that when Sapir refinanced the mezzanine debt on a Madison Avenue asset several months ago, it put him in default of their buyout agreement from 2018, according to the complaint.
In 2018, Sapir agreed to buy out Rosen’s 50 percent stake in their shared assets for $75 million, with $15 million upfront, and the remainder paid over 15 years. Two office assets, at 260 and 261 Madison Avenue, which are both owned by the entity 260-261 Madison Avenue, would act as collateral. According to the agreement, if any changes were made to the financing of the Madison Avenue assets, the remaining debt from the buyout would come due, according to the complaint.
In March, Sapir refinanced a $30 mezzanine line of credit from Bank Leumi on the Madison Avenue properties without disclosing it to Rosen, allegedly putting him on the hook for the $47.5 million remaining of Sapir’s debt to Rosen, according to the complaint.
Rosen’s suit also includes a defamation claim against Sapir because of press statements made in connection with the lawsuit Sapir brought against Rosen earlier in July. The trade secret claim made in that complaint is untrue, Rosen’s complaint argues, because the files he took from the Sapir Organization were not confidential, according to their agreement.
Legal counsel for both parties say that the suits against their clients are distractions against the underlying issues.
“Mr. Sapir tried to distract from his default on his agreements with Mr. Rosen by filing a frivolous lawsuit against the Rosen brothers,” Sheron Korpus, legal counsel for Rosen, wrote to CO in an email. “This lawsuit seeks to hold Mr. Sapir accountable for his defaults and resulting damages.”
“Predictably, Rotem Rosen has filed a meritless retaliatory action against Mr. Sapir to distract from the misconduct alleged against Rosen and his brother in the action recently filed against them in state court,” according to a statement from Terrence Oved, legal counsel for Sapir.