Attorney General Andrew Cuomo Provides Critical New Information That Could Stop Starrett City Deal And Vows To Block Any Attempt At Co-op Conversion
NEW YORK (February 16, 2007) — Attorney General Andrew Cuomo today announced that his office will enforce a State Supreme Court injunction banning Starrett City principal purchaser David Bistricer from certain real estate transactions for life, and will not permit the conversion of any of the property to cooperative apartments.
According to Cuomo, “Enforcement of this injunction may very well kill this ill-conceived deal and protect the tenants of Starrett City.”
Cuomo also provided U.S. Housing and Urban Development (HUD) Secretary Alphonso Jackson a letter and supporting court records that may provide HUD with a basis for blocking the sale of the Starrett City complex altogether. The material includes the injunction, obtained by the Office of the State Attorney General, banning principal purchaser David Bistricer from certain real estate deals.
Under federal law, HUD can consider a purchaser’s background before consenting to real estate deals such as the proposed sale of Starrett City. Since 1998, Bistricer has been under permanent injunction from the offer and sale of cooperative buildings and apartments. The order, signed by New York Supreme Court Justice Diane Lebedeff, stemmed from a finding of a pattern of abuse and deception by Bistricer in prior cooperative apartment conversions and sales.
“It is shocking that the main buyer in this massive deal is a man who has been banned for life from doing co-op transactions across the entire state,” Cuomo said. “My office will enforce the injunction and prohibit converting any of the property into cooperative apartments. Also, David Bistricer’s sordid legal history must be considered by HUD before it authorizes this sale. The material I turned over today should be enough to ban him from this deal at the start.”
Findings that led to the court order against Bistricer include that he failed to disclose the terms of refinanced mortgages in amendments filed prior to the auction of apartments he owned, a violation of the Martin Act. He was ordered to pay $450,000 in restitution to residents and $50,000 to the State Attorney General’s office.
The Attorney General’s office also fielded complaints against Bistricer in 1989 from tenant shareholders at the Fort Tryon Apartment Corp. in upper Manhattan, which had been converted into co-op apartments by Bistricer and his parents. Complaints included that Bistricer used corporate funds for work on his family’s personal apartments and failed to permit shareholder participation in the running of the co-op.
In 1992, shareholders again complained that Bistricer and his family refused to surrender control of the co-op board, a violation of regulations and representations in the Fort Tryon co-op offering plan. Shareholders also raised questions about the refinancing of the apartment corporation’s mortgage, which was held by the Bistricer family, including the extraction of a large prepayment penalty as part of the transaction negotiated by Bistricer.
Cuomo previously served as Secretary of HUD under President Bill Clinton from 1997 to 2001.Attachment: For Adobe PDF files you can download Adobe Reader from Adobe Systems.
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