Real Estate Syndicator Takes Developers to Court Over Alleged Misrepresentation
A multimillion-dollar lawsuit is unfolding in St. Louis County Circuit Court, as Lakewood, New Jersey-based Silverstone Management accuses developers of misrepresenting the condition of a 272-unit apartment property in St. Peters, Missouri.
A $70 Million Sale Turns Sour
In November 2022, Silverstone purchased Bold on Blvd from Indianapolis-based developer TWG Management and its affiliate TWG Construction, as well as Bold St. Peters, a joint venture between TWG and New York City-based private equity firm Mandrake Capital Partners. The sale was valued at $70 million. However, Silverstone alleges that the defendants provided misleading information about the property’s condition, leading to a significantly lower return on investment than expected.
Construction Defects and Inconsistencies
According to court documents, the defendants failed to disclose critical information about the property’s construction defects, including bathtubs installed without supports, moisture penetration, faulty plumbing connections, and inconsistent installation of gutters. These issues resulted in mold growth, wood rot, and even injuries to tenants. Furthermore, Silverstone claims that the defendants did not provide all lease agreements, and that some tenants had lease agreements that did not align with the ones provided.
Threats of Violence and Security Concerns
The situation took a darker turn when Silverstone attempted to evict non-paying tenants who were not qualified to lease at Bold on Blvd. The company received threats of violence, prompting them to hire armed security to patrol the property and protect staff and residents.
Seeking Damages and Justice
Silverstone is seeking damages exceeding $25,000, as well as pre- and post-judgement interest and attorneys’ fees. The company alleges breach of contract, fraudulent nondisclosure, and misrepresentation, as well as breach of the implied warranty of habitability. A jury trial has been requested.
A Previous Lawsuit Dismissed
Interestingly, Bold St. Peters had previously filed a lawsuit against Silverstone in Jackson County, Missouri, court in December 2022, shortly before the sale of Bold on Blvd closed. The case was filed under seal and dismissed by both parties in January 2023. The details of that lawsuit remain unknown to the public.
As the legal battle unfolds, it remains to be seen how the court will rule on Silverstone’s claims. One thing is certain, however: the alleged misrepresentation of Bold on Blvd’s condition has led to a complex and contentious dispute that will have far-reaching implications for all parties involved.
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