The worlds of high-stakes real estate and high-society clubbing collided violently this week when the owners of the exclusive Core Club filed a shocking lawsuit against their partner and alleged landlord, Michael Shubo, seeking $600 million in damages.
The lawsuit, filed in New York State Supreme Court, alleges that Shubo used a “wicked and fraudulent” scheme to lure the glitzy business and culture-focused Core Club to 711 Fifth Avenue, a building he claims to own.
The alleged conduct included Schvo’s dastardly attempt to seize 50 percent control of the club for $1, failing to fulfill promises to build and fund new club branches in Milan, Italy and San Francisco, and delaying and mismanaging the opening of a new club in Manhattan, forcing Core founders and owners Jenny and Danjean Enterprises to dip into their own funds.
Membership to the ultra-exclusive Core Club, which occupies 60,000 square feet on the top four floors of the former Coca-Cola building, starts at $15,000 a year and goes up to $100,000 depending on the level of access.
Larger and more luxurious than its previous location at 66 E. 55th St., where Core Club first opened in 2002, the club attracts New York City’s elite from politics, Wall Street, real estate and the law.
Current and past members include Mets owners Steven Cohen, Kenneth Cole and Tory Burch, NFL Commissioner Roger Goodell and investor Anthony Scaramucci.
The lawsuit was shocking. Love seemed to be in the air between the married Enterprise and Mr. Schvot, whose high-profile office tenants at 711 Fifth include French hotel company Accor, Loro Piana and Allen & Co. The building is also home to Ralph Lauren’s popular restaurant, Polo Bar.
The sparkling amenities will include 555, a restaurant, a bar, a speakeasy-style lounge, an outdoor terrace, an art gallery space, private guest suites and a luxury spa.
Jenny Enterprises said the opening of Core Club in October 2023 “marks a significant moment in our history. This new landmark location will allow us to take our founding vision into an exciting new chapter.”
But the launch was far from exciting for her and Dan Jean, according to the lawsuit. Bisnow New York.
According to the lawsuit, Enterprise was forced to pay $800,000 to extend its lease at its previous location because Schvo failed to obtain a certificate of occupancy in a timely manner.
Sloppy construction work was also an issue at the time of the club’s opening, with claims that “Schvot arbitrarily removed strip light installations and ceiling light covers from the project, leaving the club dimly lit and visually uninviting.”
According to the lawsuit, Schvo also allegedly used the club’s restaurant and event space for his own private events, including his children’s birthday parties, for which he racked up $80,000 in debt, and improperly took advantage of them by showing favoritism to his wife, Seren.
But the core of the lawsuit is an allegation that Shubo reneged on a promise to spend $100 million on “major expansions” of the club in other cities and wrongfully conspired to seize 50 percent of the business.
According to the lawsuit, Schwoz is merely the property manager of 711 Fifth Ave., which is actually owned by a German pension fund, Bayerische Pensions Fund (BVK), and that he “sought to leverage BVK’s assets to secure a 50% personal ownership interest in the Core Club.”
Enterprise also said Shubo and BVK conspired to get Core Club to enter into an “unfair” lease at 711 Fifth because Shubo promised to invest $100 million in the property.
Shubo’s lawyer, Morris Misley, called the lawsuit “a desperate attempt to rescue the Core Club owners from fulfilling very clear obligations to which they committed in a series of binding written agreements.”
Misley added, “We will not be coerced or threatened into lowering rent or making any other unreasonable concessions, and we intend to vigorously defend this lawsuit.”
Sources say a settlement could come sooner than would be expected given the lawsuit’s brutal language, which includes references to Shubo’s past “felony convictions for tax evasion.” (Shubo paid $3.5 million in restitution in 2018.)
Enterprise and its lawyers did not respond to requests for comment.
