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Not So Fast: Co-op City Told to Reinstate Marion Scott During Investigation

Vivian Lee in Legal/Financial on January 9, 2015

Co-op City, The Bronx

Jan. 9, 2015

Namely, the terms of RiverBay's financing deal with the government and Wells Fargo Bank, the report said. Unsurprisingly, right before the end of the year, Marion Scott made its move.

The management company filed a lawsuit in state Supreme Court against RiverBay, claiming the corporation's move to suspend it as Co-op City's managing agent was illegal. Marion Scott seeks to be reinstated to its management role and is also seeking damages for defamation.

It gets stickier. According to a recent New York Daily News report, RiverBay received a letter from the New York State Homes and Community Renewal agency, which oversees state-administered affordable housing, delivering more bad news: its move to suspend Marion Scott "violated state regulations as well as the terms of a $621 million refinancing deal with Wells Fargo and federal agencies in 2012." The state agency, adds the Daily News, has "advised the directors to reinstate and retain Marion Scott until it wraps up an investigation into the allegations."

Is RiverBay listening? Marion Scott says no, alleging that although "Richmond McCurnin, president of the N.Y. State Office of Housing Preservation, has directed RiverBay to immediately reinstate Marion Scott employees … the board has refused to comply."

"This is a rogue group that has taken over the management of Co-op City illegally and is embarking on a reckless path that can severely damage the development," says Herbert Freedman, a partner at Marion Scott.

Freedman wants "to see RiverBay carry out a fair and legal process to select a managing agent," a job that Marion Scott, which has managed Co-op City for 15 years, is willing to compete for, he added.

 

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