Investors Sue Thor Equities Over Lack Of Distributions From Fifth Avenue Building
Two investors are taking Joe Sitt's Thor Equities to court, claiming they weren't paid distributions for their investments in one of Thor's properties on Fifth Avenue.
The investors say Thor is refusing to show its investors its books and hasn’t paid any distributions to two investors that it worked with to acquire a 50% stake in a retail condo at 530 Fifth Ave., The Real Deal reported.
Intelectiva Real Estate, a Mexico-based investment group, and Aranjuez Real Estate invested in Thor's stake in the property, which Sitt's firm paid $595M for in 2014. Intelectiva paid $1.8M and Aranjuez paid a total of $7.1M, according to the suit, which was filed in the U.S. District Court for the Southern District of New York.
Intelectiva and Aranjuez said Thor reported the space made operating losses every year between 2017 and 2022, despite the property’s location in one of the country’s busiest retail markets.
Due to the losses, the investors were told they weren't entitled to distributions, the suit says.
Instead, according to the suit, Thor asked investors for multiple capital calls to cover debt payments at the property, a 26-story retail and office property between 44th and 45th streets, which is “prime retail space in a very tourist-heavy location,” the investors said in their suit.
In May 2022, Intelectiva and Aranjueza allege that they were informed by a managing member at Thor that they would receive a payment, but that "it became clear that the anticipated distribution was significantly less" than expected by Intelectiva and Aranjuez.
No distribution was ever made, the investors claim.
The investors say Thor told them their ownership shares had been diluted and that they weren't given notice or explanation. They say that they also asked to see Thor’s documents regarding the dilution of their interest but heard nothing other than a two-line email last April in response.
The suit gave an example of one response to a query made by the investors in May 2022. The email didn't receive a response until August, which said: "pulling together a reply on this and will be back to everyone shortly."
The investors didn't get a response until January 2023, they said in the suit, when they were told that their stakes had been diluted by more than half in a change that had occurred in 2017.
The investors are asking the federal court to force Thor to open its books. A spokesperson for Thor didn't immediately respond to Bisnow’s request for comment.
Many of Thor's investments along Fifth Avenue last decade have run into trouble. Two of its properties, 597 Fifth Ave. and 3 East 48th St., were placed into receivership last summer. It lost 590 Fifth Ave. in a foreclosure suit to SL Green in 2020.
Thor has pivoted away from the high streets of Manhattan to industrial and life sciences buildings with projects in Brooklyn and New Jersey. It also has proposed building a casino-anchored development in Coney Island.
