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Russian Oligarch Disrupts New York Developments: Suit

A sanctioned Russian oligarch is trying to ‘blow up’ three Manhattan development projects he had invested in through shell companies, a lawsuit alleges.

Nine days before Russia invaded Ukraine, Mikhail Vasilyevich Klyukin – a board member of Sovcombank, Russia’s ninth-largest bank – sent letters to financial institutions, lenders and lawyers supporting the three projects, saying developer Gary Vinbaytel should be fired, without saying why, Manhattan Supreme Court documents show.

Mikhail Vasilyevich Klyukin is a member of the board of directors of the ninth largest bank in Russia.
Mikhail Vasilyevich Klyukin is a member of the board of directors of the ninth largest bank in Russia.

The developments include a six-story Chelsea condominium at 192 Eighth Ave., all residential units of which have already been sold; a seven-story condo complex at 238-240 East 3rd St. in the East Village, which was about to obtain a permanent certificate of occupancy; and a nearly completed five-story commercial building at 128 West 26th St. in Chelsea that is expected to be completed by the end of the year, current project managers said in legal documents.

Klyukin, 44, accused the various companies running the projects of wrongdoing and claimed his own company, Ahimsa, should take control – but never said what the alleged wrongdoing was, according to the lawsuit filed. by D&V Realty and other companies developing the projects.

The oligarch’s letter “could only have been an attempt to ‘blow up’ the projects and the Companies”, according to the lawsuit.

The result was “devastating” for the companies involved, they charge in the court filing. One bank froze developers’ accounts, while another delayed funding a construction loan for Wet 26th Street work.

Sovcombank was sanctioned by the United States on February 24, the same day Russia invaded Ukraine, while Klyukin was sanctioned a month later, along with more than a dozen others, as part of a wave of sanctions intended to punish Russian interests during the invasion.

The sanction means that two of the projects in which Klyukin has a majority stake are now banned from doing business. The West 26th Street development, in which Klyukin does not have a majority stake, is the only project that could have proceeded despite the sanctions.

Almost all of the residential units at 192 Eighth Avenue have been sold.
Almost all of the residential units at 192 Eighth Avenue have been sold.
Robert Miller
238-240 East 3rd St. was about to get a permanent certificate of occupancy.
238-240 East 3rd St. was about to get a permanent certificate of occupancy.
Robert Miller

“We don’t know exactly his motives, but our interest is to protect the citizens of New York and the United States and the residents of the United States,” said D&V Realty attorney Christopher Travis.

In a legal filing responding to the lawsuit, a Klyukin lawyer accused Vinbaytel of withdrawing $120,000 from the company’s bank accounts without providing supporting documentation. Travis called the allegations baseless.

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Post expires at 11:19am on Wednesday June 29th, 2022