On Thursday, February 9, in New York federal court, a complaint was filed that asked the federal government to seize the tower located at 650 Fifth Avenue from a nonprofit organization that has alleged strong connections with the Iranian government.
This is just the most recent move in a legal war that has been going on for a decade between the U.S. government and the Alavi Foundation, for control of the 36-floor office building with an approximate value of $1 billion. The U.S. Supreme Court might hear a related case.
In the complaint filed on Thursday in U.S. District Court, plaintiffs Jeremy Levin, who was kidnapped by an Iran-backed Lebanese Shiite militia group, Hezbollah, in 1984, and his wife Lucille claim that they are owed $34.4 million from a judgment in 2008 related to state-sanctioned terrorism. Their argument is that the funds should come from the federal government selling off Alavi’s assets and giving the proceeds to terror victims.
In January, Levin, who escaped close to a year in captivity, obtained a writ of execution against the defendants’ assets, which included the 36-story office tower.
The Real Deal reports, “Alavi owns 60 percent of 650 Fifth Avenue, and the U.S. government holds a 40 percent stake in the building after previously seizing it from the Assa Corporation, an entity linked to Iran’s national bank. The Levin case has for years slowly snaked its way through appeals courts, along with a number of other lawsuits that seek to seize Iranian assets in the U.S. to satisfy damages from state-sponsored terror attacks. Tomorrow, plaintiffs in a related case, Kirschenbaum v. Alavi Foundation, have a deadline to respond to Alavi petition to the U.S. Supreme Court. If the Supreme Court hears the case and rules in its favor, Alavi could effectively shut the door on the federal government’s attempts to fully seize the office tower, which was nearly successful a few years ago.
Following a 2013 ruling in U.S. District court that favored the federal government — and one that consolidated Kirschenbaum’s and Levin’s cases — Alavi’s U.S. properties were placed under the control of a court-appointed monitor, a former federal judge.”
Alavi went into an agreement for a joint venture with SL Green Realty and Jeff Sutton’s Wharton Properties, before it lost control of the building, to get a 49-year leasehold for the tower’s retail portion. The property was seized while the deal was in process when the building was seized. The deal was soon closed once the U.S. government, Alavi and the former federal judge who had been appointed to oversee Alavi’s stake all agreed to its terms.
TRD reports, “In July 2016, the Second Circuit of Appeals overturned the U.S. District Court’s decision, and found that the government prosecutor had presented insufficient evidence that Alavi knowingly partnered with a sanctioned entity — Iran. Following the surprising decision from the Second Circuit Court of Appeals, most of Alavi’s U.S. properties were returned, with the exception of 650 Fifth Avenue. Because Assa’s 40 percent interest in 650 Fifth Avenue has been forfeited to the federal government, the building is still overseen by the court appointed monitor. Alavi remains the majority owner, but the forfeited portion controlled by the government is at risk of being sold.”
By Rebecca Gold