Harry Macklowe and 432 Park Avenue (Getty)
Oct 11, 2023 , By Keith Larson
Harry Macklowe is not backing down from CIM Group.
A foreclosure auction initiated by CIM Group of the developer’s personal residences at 432 Park Avenue was canceled at the last minute Wednesday. Macklowe put an entity controlling his equity stake in his units at the luxury tower into bankruptcy protection.
The bankruptcy pauses the Uniform Commercial Code foreclosure and gives Macklowe more time to refinance or sell his units at the tower, which he built with CIM. He said in a filing that the purpose of the bankruptcy is to refinance or sell unit 78A.
CIM and Macklowe’s 432 Park was the tallest residential building in the world when it was completed. It had some of the priciest listings in New York City.
But recently the two sides have gone to war in court and are trading accusations.
Macklowe has alleged Los Angeles-based CIM swindled him out of $110 million in distributions that he claims he was owed as a developer. CIM alleges Macklowe lived the high life while defaulting on $46 million in loans it provided on three units in the building.
CIM tapped Northgate Real Estate Group’s president Greg Corbin and Felix Ades to market the foreclosure, which includes the entire 78th floor and an accessory unit on the 28th floor.
Macklowe bought the site for 432 Park Avenue, which was then the Drake Hotel, for $413 million in 2006. In 2010 CIM swooped in and paid off his debts in the property. Macklowe sold his interests to CIM, which agreed to pay the developer a promote, or a fee, on future sales.
In May 2022, Macklowe acquired three units in the buildings. He claims that he planned to pay for them using proceeds owed to him by CIM, but that he did not receive any payments. Instead, CIM lent him more than $46 million to acquire the units.
CIM alleges Macklowe sent its firm a notice of arbitration alleging an amended agreement required they settle out of court. But CIM claimed that agreement does not apply to Macklowe’s loans.
A New York state judge recently struck down Macklowe’s attempt to stay the civil litigation between himself and CIM as Macklowe pursues arbitration, which is set to be heard in March, according to a court filing.