The Real Deal: Held & Hines’ Case Covered by the Media

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Anglo Irish poised to put Rector Square on auction block

September 01, 2009 11:30AM By David Jones

Yair Levy, 225 Rector Square

Anglo Irish Bank filed a motion in New York State Supreme Court earlier this month to complete foreclosure proceedings against Rector Square developer Yair Levy and place the troubled Battery Park condominium conversion on the auction block for sale to a new investor.

Anglo Irish originally filed suit in February alleging that Levy defaulted on a $165 million mortgage loan to convert the 304-unit rental building at 225 Rector Place, and failed to pay millions of dollars in contractor’s fees, common charges and PILOT payments to the Battery Park City Authority, which controls the ground lease under most if not all Battery Park buildings.

Levy later tried to preempt the foreclosure suit by filing a countersuit in Nassau County, where he resides, alleging that Anglo Irish forced his property into default by holding up construction dollars. That case was later consolidated into the foreclosure suit filed by Anglo Irish.

Anglo Irish was issued subpoenas in recent months under a state and local investigation of the Rector Square reserve fund, sources say, which was depleted prior to the foreclosure proceeding. Officials alleged that funds in the Rector Square reserve fund and operating funds were not properly accounted for, and sources say that Manhattan District Attorney Robert Morgenthau was asked to step into the probe. A spokesperson for Morgenthau’s office told

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