A $600 million lawsuit filed by the Core Club, the ultra-exclusive Fifth Avenue power mecca, against a New York real estate mogul is rotten to the core, according to the developer being sued.
Core owners Jenny and Danjean Enterprises alleged last month that real estate mogul Michael Shvot reneged on a deal to acquire a 50% stake in the company in exchange for investing $100 million in the club to fund locations in San Francisco and other cities, including Milan, Italy.
The suit also alleged that Schvo botched the opening of Core Club’s Fifth Avenue flagship store as part of an “evil and fraudulent” scheme, forcing Enterprise to use its own funds to open it.
The club occupies the top four floors of 711 Fifth Ave. Powerhouses from finance, real estate and media pay anywhere from $15,000 to $100,000 a year for various levels of access.
In documents filed in Manhattan Supreme Court, Schvo called Core’s claims a “cynical ploy” to “sue in the press” for rent reductions and avoid other payments it is owed under its contract with Schvo, including $10 million in construction cost overruns.
Shubo has asked the judge to dismiss the case, arguing there is no contract committing him to a $100 million investment, only a non-binding term sheet, which he claims makes no mention of the Milan club.
In fact, Shubo claims, the only written agreement was to pay $46 million for the construction of clubs in New York and San Francisco.
According to court documents, Enterprise was unable to complete the work because it “could not attract enough members to stay afloat,” and so in January 2022, it begged him for a $1 million loan, to which he “reluctantly” agreed.
Schwoz claims in the complaint that Enterprise’s lawsuit is filled with “malicious and baseless attacks on Mr. Schwoz’s character” and is misplaced in many ways, including by erroneously naming as defendants three German banks that have no connection to the lawsuit against Mr. Schwoz.
As for the lawsuit’s allegation that Core Club tried to bill Schvo for $80,000 to host parties, Schvo said the filing makes no mention of “multiple requests by Enterprise to have Schvo and his wife entertain at the club and help attract new members.”
Adam D. Glassman, an attorney for Enterprise, called Shubo’s move to dismiss the lawsuit “a predictable attempt to avoid responsibility and delay the legal process. The motion is riddled with distortions and misinterpretations of the facts.”
He said Shubo “used his position of trust to [the Enterprises’] Costs, unfair negotiations [New York] This was for “defaulting on the lease” and “acting as both a partner and agent of the landlord” and “failing to meet financial obligations.”
