UPDATED, 16 October 2020, 16:30: Richard Ruben has accused business partner Jonathan Resnick of usurping control of a luxury mixed-building he owns in a lawsuit claiming the building had “fallen into difficult times.”
In a lawsuit filed with the Manhattan Supreme Court, lawyers representing Ruben, CEO of Ruben Companies, Resnick, led by Jack Resnick & Sons, accused him of taking control of a $ 20 million joint bank account, censoring information and restricting Ruben’s access to books, and staff at Symphony House, a residential area of the couple’s building at 235 West 56th Street.
The 44-storey building in the middle of the dispute was developed by Resnick in 1986. It includes a 34-storey luxury residential tower with 480 residential apartments, 250,000 square feet of office and retail space and a parking garage for 146 cars.
According to court documents, disagreements arose between them 18 months ago, but the situation became even more urgent with the added emphasis on Covid-19. The court claims that the property is in great difficulty with an vacancy rate of 35 percent of the residential area.
“Symphony House needs an immediate significant capital investment and relocation,” Ruben said in a sworn statement. Ruben’s representatives declined to comment on the lawsuit.
“Resnick has always acted in good faith and in accordance with all its obligations under the parties’ agreements,” said a Resnick spokesman. “We are disappointed that with the departure of our President Burt Resnick, and even as his health has deteriorated, Ruben is undertaking opportunistic attempts – and has now taken this frivolous measure – to steal a business that was highly profitable and incremental to both families.”
Ruben’s lawsuit seeks to block Resnick’s unilateral decision-making on property and force him to open books to the former. Hiding the financial records of the property, Ruben worries, worries that Resnick is trying to “hide deeper conflicts of interest or anything else about their management – and possible financial or operational mismanagement – of the property.”
The lawsuit also claims that Resnick excluded Ruben from long-term real estate decisions, including how to reduce the current vacancy rate.
Ruben said that instead of working hard to re-lease the space in the building, Resnick, whose company is also a real estate management agent, recommended allowing corporate tenants to be left without paying rent.
After going through real estate in July, Ruben found that the building needed a “top-down view of the tenant’s entire experience” to succeed in New York’s “hypercompetitive” residential markets.
According to the lawsuit, Resnick defended this recommendation and later hired a consultant to rent and sell apartments against Ruben’s wishes and expelled his partner from meetings with the consultant.
The partnership between Ruben and Resnick was formed 40 years ago when Arthur Belfer, Ruben’s grandfather, and Jack Resnick, Jonathan’s grandfather, planned real estate deals from the steam room of their jointly owned Sun and Surf apartments in Palm Beach.
Burt Resnick, father of Jonathan Resnick, died in December 2019and Richard and Jonathan “do not share the same level of collegiality” as their grandfathers.
In addition to Symphony House, the partnership owns five Manhattan properties: 110 East 59th Street, 880 3rd Avenue, 485 Madison Avenue, 161 William Street and 52 Broadway.
UPDATES: This story has been updated to add a comment from Resnick.