Real Estate

NYC’s Biggest Foreclosure Halted After New Creditor Emerges

Updated on
  • Debt firm seeks to collect $83.1 million for gas, jet fuel
  • Penthouse at One57 was scheduled to be auctioned tomorrow

The One57 skyscraper on June 16, 2015.

Photographer: William Edwards/AFP/Getty Images

New York’s biggest-ever foreclosure auction, for a penthouse at the One57 luxury tower near Central Park, has been halted after a new creditor emerged saying it’s owed money -- for about $83 million worth of gasoline and jet fuel -- by the owner of the apartment.

Unit 79 at the Billionaires’ Row tower -- bought in 2014 for $50.9 million -- was scheduled to be sold at auction tomorrow, in a seizure forced by a Luxembourg lender seeking to recoup an unpaid $35.3 million mortgage. The U.S. Justice Department intends to collect any remaining proceeds, claiming the owner bought the condo with illicit gains from Nigerian crude-oil sales.

For now, the auction of the 6,240-square-foot (580-square-meter) penthouse is canceled, according to Mark McKew, the New York lawyer appointed to handle the sale. Debt collector Campion Maverick Inc. filed papers in federal court in Florida on July 3 seeking to force the owners of the apartment, Earnshaw Associates Ltd. and One57 79 Inc., into bankruptcy as a way to recover an unpaid tab of $83.1 million for gasoline and jet fuel.

Both of those shell companies are linked to Kolawole Akanni Aluko, a Nigerian businessman accused by the U.S. of receiving contracts with his country’s state-owned oil company after bribing a government official. Aluko and an associate lavished that official, Diezani Alison-Madueke, with millions of dollars worth of artwork, furniture and London real estate, according to a lawsuit filed July 14 by the Justice Department’s Kleptocracy Asset Recovery Initiative.

The businessmen failed to abide by the terms their contracts, yet were permitted to sell more than $1.5 billion worth of Nigerian crude oil, according to Justice Department documents. They then used the proceeds to go on a global luxury spending spree, according to the lawsuit. Aluko’s purchases include the apartment at One57 and an $80 million yacht called the Galactica Star that the U.S is also trying to seize.

Private Jets

Aluko’s other assets include three private jets, 58 cars and luxury real estate in Los Angeles and London, according to court filings last year in Nigeria’s Federal High Court, which sought to freeze Aluko’s holdings across the globe.

The debt collector’s filing in Florida seeks to force Aluko’s shell companies into bankruptcy as a way of paying back a debt owed to an Ivory Coast petroleum supplier. Aluko, using his own name, signed a debt-settlement agreement in 2012 with the company, according to court filings in Florida. In 2015, that debt was then guaranteed by Earnshaw, the sole shareholder of One57 79 Inc., which is listed New York City public records as the owner of the Manhattan penthouse that was scheduled for auction.

Michael Lubben, a New York attorney who, according to court records, represents One57 79 Inc. in the foreclosure case, didn’t return a call seeking comment. Andrew Messite, a lawyer representing Luxembourg’s Banque Havilland SA, the mortgage lender that initiated the foreclosure, also didn’t return a call. Tokunbo Jaiye-Agoro, who has represented Aluko in the Nigerian court case, didn’t respond to a message left with his secretary at his office in Lagos.

One57, built by Extell Development Co., has become a symbol of Manhattan’s luxury-development boom. The tower, which broke ground in 2009, holds the record for the city’s most-expensive residential sale, at $100.5 million.

— With assistance by Steven Church, Alan Katz, and Franz Wild

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