Apthorp Sues Anglo Irish Seeking to Block Sale of Apartment Complex Loan

Anglo Irish Bank Corp., the
nationalized lender, was sued over the sale of a loan tied to
the condominium conversion of the landmark Apthorp building on
Manhattan’s Upper West Side.

Anglo Irish, which is selling a $9.7 billion portfolio of
U.S. real estate loans, must maintain at least a 51 percent
interest in the $385 million loan, Apthorp Associates LLC said
in a complaint filed today in New York state court in Manhattan.
Apthorp is the sponsor of the condo conversion of the building,
according to the complaint.

“Apthorp’s express contractual right to have a single
majority lender on the project throughout the term of the loan
will be lost absent prompt injunctive relief, thereby causing it
irreparable harm,” Apthorp said.

JPMorgan Chase Co., Wells Fargo Co. and Lone Star Funds
won the bidding for Anglo Irish’s $9.65 billion portfolio of
U.S. real estate loans, three people briefed on the auction’s
results, who couldn’t be named because the results weren’t
public, said last month. The Dublin-based bank was nationalized
in 2009 and is being wound down over a decade.

Billy Murphy, a bank spokesman, didn’t return a phone call
seeking comment.

Historic Places

The Apthorp is on Broadway between West 78th and West 79th
streets in Manhattan. It was built in 1908 and is listed on the
National Register of Historic Places, according to the
building’s website.

Apthorp said it negotiated to have Anglo Irish remain the
majority lender on the loan to keep a lender familiar with the
conversion project. The provision about Anglo Irish’s interest
in the loan was meant to protect Apthorp against “an unsuitable
lender” obtaining control, it said in the complaint.

“Continued financial commitment to the conversion project
by the same lender (or substitute lender acceptable to Apthorp)
is critical to its smooth operation,” Apthorp said.

The case is Apthorp Associates LLC v. Anglo Irish Bank
Corp. Ltd., 652492-2011, New York State Supreme Court
(Manhattan).

To contact the reporter on this story:
David McLaughlin in New York at
dmclaughlin9@bloomberg.net

To contact the editor responsible for this story:
John Pickering at jpickering@bloomberg.net