Kasowitz Secures Denial of Motion to Dismiss in CDCF Suit Against Motcomb Estates and Reuben Brothers
Kasowitz Benson Torres secured a significant victory on behalf of CDCF IV Century Mezz in its lawsuit against Motcomb Estates and its affiliate Reuben Brothers for breach of contractual duties as agent under a participation agreement. On September 30, 2022, Justice Barry R. Ostrager, New York State Supreme Court, New York County, ruled from the bench denying Motcomb and Reuben Brothers’ motion to dismiss CDCF’s amended complaint. The action arises out of Motcomb’s administration of a mezzanine loan, in which CDCF and Reuben Brothers are both participants, that was used to finance the $2.5 billion Century Plaza project in Los Angeles. The amended complaint alleges that Motcomb failed to follow Accepted Servicing Practices, as defined in the parties’ participation agreement, when it failed to take action for over a year following the mezzanine borrower’s default, and instead allowed millions in default interest to accrue to the sole benefit of its affiliate, Reuben Brothers, which holds both the Participation A interest in the mezzanine loan and the entire senior construction loan for the project, also in default. The court sustained CDCF’s claims for breach of contract and specific performance against Motcomb and CDCF’s claim for breach of the implied covenant of good faith and fair dealing against Reuben Brothers.
The Kasowitz team representing CDCF is led by partner Sheron Korpus and includes special counsel Alycia Benenati.