After spending many hours attempting to reach a compromise agreement on the Apthorp building in New York's Upper West Side, Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) chairman Lev Leviev and his partner in the New York City building, Maurice Mann, have decided that responsibility for managing the building will be given to an outside company.
Last Thursday was the final date for settling the dispute under an ultimatum given to Leviev and Mann by the Apollo Real Estate Advisors, which had extended a loan for the building but was threatening to withdraw it.
Under the compromise, Leviev and Mann have agreed that Feil Organization will be the new management company for the building. According to sources in New York, Mann will retain his stake in the building but will no longer manage it.
Three weeks ago, Leviev submitted documents to the New York State Supreme Court in which he described Mann as "having gone wild" in his position as project manager by squandering the project's funds on his personal legal expenses.
According to the documents submitted to the court, Leviev plans selling the Apthorp in Manhattan for $552 million after the project's management council approved the sale, although Mann refused. Last week the two sides entered the process of settling the dispute and the court's judge instructed Mann to accede to Leviev's request to cooperate in the arbitration procedure.
In March 2007, Africa-Israel acquired 50% of the project for $426 million through its subsidiariy Africa-Israel USA Inc.
The documents submitted to the court three weeks ago show that the project is in financial difficulties.
Published by Globes [online], Israel business news - www.globes-online.com - on January 18, 2009
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