Brooklyn development projects that are being sold to private equity firms are not for sale, a federal bankruptcy judge said Tuesday, after a group of investors filed a lawsuit against the bank.
U.S.-based developer, Bankers Trust Company, which acquired the development projects in the borough of New York City in January, sued in federal court, claiming the lenders’ sales representatives were acting in bad faith.
The lawsuit says the development companies have not yet completed the $150 million purchase of land for a new hotel and condominium complex.
The suit said the development is a fraud and represents a breach of the bank’s fiduciary duties.
The bank has not yet filed a response to the suit.
The lawsuit seeks to block Bankers trust’s purchase of the development properties, arguing that they are not the assets of the developer, and the bank could have done more to protect them.