Over the determination by CIM Group that Harry Macklowe’s stake in 432 Park is valued at only $48 million, Macklowe says he will not fight his partners, but does not agree with them.
On Thursday, December 7, the real estate mogul was back on the stand in the ongoing preceding for his messy divorce from his wife of 58 years. The hearing is working to determine how the couple’s estimated $2 billion is to be divided.
Last week’s issue was how much Macklowe’s stake in the supertall 432 Park was worth. His stake had been calculated with a value more than $400 million, up until last year. According to his testimony, his stake was one quarter, or half of the 50 percent stake he shares with his equity partner on the project CIM Group, of the expected net proceeds of $1.8 billion.
Now Macklowe claims that his stake in the property has shriveled into a mere $48 million from the over $400 million.
An email in 2016 from CIM was referenced by Macklowe. The email was informing him that their joint stake had dropped to 39 percent, and that increased expenses and a conflict in opinion of disbursement calculations his interest was valued at had caused his interest to be valued at $48 million.
In court on Thursday, Macklowe acknowledged that he was shocked by the figure, and Linda’s lawyer John Teitler asked if he planned on pursuing a claim over the issue against CIM.
Macklowe responded, “I am not currently pursuing a claim.” However, he did say that he planned to review all of the terms before deciding the value of his interest for himself.
The judge that was presiding over the hearing, Laura Drager, asked, “And if you found that there was a disagreement about the terms, how would you proceed?”
Macklowe said, “I would speak openly with my partners. I doubt that I would have to litigate.”
According to The Real Deal, “Teitler switched to a different line of questioning, in an apparent attempt to argue that Macklowe’s use of personal guarantees and other business decisions led to losses at of some of his properties, hurting the value of the couple’s shared assets. But the judge was having none of it. ‘I don’t see the purpose of this,’ she said, and launched into a takedown of Teitler’s argument. ‘At the end of the day, so what?’”
Linda whispered to Teitler, “Would you open your mouth and say something?”
Judge Drager then said sarcastically, “I am sorry that the party’s assets went down to over a billion dollars.” She added that the failures of Harry Macklowe were not relevant to this court hearing. She said, “Sometimes you win, sometimes you lose. That’s the nature of the business.”
By Charles Bernstein