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Asi Cymbal Seeks To Place Design 41 Project Into Receivership

February 13, 2014

Developer Asi Cymbal wants a judge to liquidate a project in Miami’s Design District where he’s embroiled in a dispute with his former partners.

Developer Asi Cymbal wants a judge to liquidate a project in Miami’s Design District where he’s embroiled in a dispute with his former partners.

BH18 LLC, which is managed by Cymbal, filed a lawsuit Feb. 6 in Miami-Dade County Circuit Court against Design District Development Partners, seeking to dissolve DDDP and place its Design 41 project into receivership. The complaint was drafted by Coral Gables attorneys Alvin Lodish and Scott D. Kravetz.

Reached by phone, Cymbal said he intends to acquire sole ownership of the property after the liquidation process and develop it with his own money, not the EB-5 visa financing plan that DDDP was based on.

In a statement through its law firm, Greenberg Traurig, DDDP said the lawsuit would not affect the ongoing development of the project, which it said would resume construction at the end of this month with a new contractor.

According to Cymbal’s complaint, he was the owner in a partnership that previously controlled the property at 112-130 N.E. 41st St. and, in 2010, Benjamin R. Norton told Cymbal he could help him secure financing through the EB-5 visa program to develop the site.

“These events took place during the Great Recession,” Cymbal’s lawsuit said. “Banks were not lending money for construction, so EB-5 financing looked like the only option to finance the project.”

Cymbal’s company sold the project to DDDP for $1.86 million in 2011. According to the complaint, DDDP’s board is led by five managers: three from Fortech Investment, one from Suncoast Community Partners and one from BH18, which appointed Cymbal. Norton was one of the managers appointed by Fortech.

Norton secured partial financing for the project in June 2012, and A&C Builders, also known as Cymbal Development, started building it, the lawsuit said.

“By June of 2013, Benjamin R. Norton had apparently exhausted the financing he secured for the project,” Cymbal’s lawsuit said. “As a result, DDDP defaulted on payments due to A&C Builders for work performed. DDDP failed to pay Cymbal Development for four consecutive months.”

In September, Cymbal Development filed a lawsuit against DDDP, seeking to foreclose on $1.2 million in construction liens for its work on the project. That case remains pending.

DDDP said in its statement that Cymbal Development was terminated for nonperformance, mismanagement and Cymbal misrepresenting himself as the owner of the project to contractors. Cymbal Development denies violating any terms of the construction contract.

On Dec. 9, 2013, several members of the DDDP board, including Norton, voted to remove Cymbal as a member; however, Cymbal wasn’t given notice of that meeting, his lawsuit said. The board must unanimously vote on all changes to its operating agreement, so this violated that provision, Cymbal’s lawsuit said. It claims that DDDP refused to return Cymbal to his position and share the company’s books and records with him. The lawsuit alleges that Norton improperly claimed complete control of DDDP.

“The project has suffered delay, damage to reputation and is without a developer or financing,” Cymbal’s lawsuit said. “This constitutes misappropriation and waste of DDDP’s assets.

Because Cymbal is at a deadlock with Norton over these issues, DDDP should be dissolved, and a receiver or custodian should be appointed to liquidate the company’s property and other assets, the Cymbal complaint requests. Cymbal said he hopes to reacquire control of the property and develop it through that process.

“Cymbal’s desperate attempts to appear to create a controversy over corporate control of DDDP are rejected as baseless and improper,” DDDP said in a statement.

Source: SFBJ

 

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