Judge dismisses move to halt Belvedere condo sales

August 21, 1991|By Edward Gunts

U.S. Bankruptcy Judge James Schneider yesterday denied a request to halt sales of the Belvedere condominiums and dismissed a case brought by a local attorney who has been investigating the connections between a company that bought the Mount Vernon landmark in March and another company that backed out of an agreement to buy it.

The action means Belvedere Realty Corp., a group headed by Elliott Sharaby, is free to proceed with sales of 112 residences and other office, meeting and retail space inside the 13-story building at 1 E. Chase St.

Judge Schneider dismissed the case after attorney Kenneth Davies, the bankruptcy trustee representing the hotel's former owners, agreed to drop a motion to halt sales and to take no further action to interfere with sales of the property.

On Monday, Judge Schneider indicated at a court hearing that he was inclined to dismiss the case on jurisdictional grounds, since the building was sold to Belvedere Realty after a foreclosure sale last December and is no longer within the purview of the bankruptcy court.

Mr. Davies filed a motion Aug. 2 stating his belief that the hotel's purchaser, Belvedere Realty, may be affiliated with the Hertz Group Inc., a company that failed to follow through on a contract to buy the building last fall for $5.54 million, even though Judge Schneider ordered it to proceed with the purchase.

Representatives of Belvedere Realty admitted last week that Mr. Sharaby knew developer Judah Hertz and used the same lawyers and lender. But they said that they have done nothing improper because they acquired the Belvedere after it was "on the open market." They added that Mr. Hertz has no direct ownership interest in Belvedere Realty.

"Everything's back to normal, and sales are continuing to be brisk," Mr. Sharaby said yesterday. "Sixty-two of the 112 condominiums have been sold. Traffic in the sales center has remained good."

Mr. Davies' agreement to drop his motion "shows there is no longer any controversy about continuing sales," said Irving Walker, an attorney for Belvedere Realty.

The investigation attracted the interest of city officials and others because under the proposed sale of the property to Mr. Hertz, the city, which invested more than $6 million to aid the previous owner, Victor Frenkil, would have owned the meeting rooms and banquet space in the building and could have made money by selling or leasing them.

When Mr. Hertz backed out of his purchase and the hotel was put up for auction in late December, the city lost any chance to recoup its investment.

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