This breach of contract action comes before the Court on a motion by Defendants Princeton Holdings LLC (“Princeton”) and Joseph Tabak (“Tabak”) for summary judgment. Plaintiff JCMC Flatiron, LLC (“JCMC”) opposes the motion. For the reasons set forth below, the motion is denied.I. BACKGROUNDThis action arises out of a joint venture between Plaintiff JCMC and Defendant Princeton to acquire tenant-in-common interests in fourteen valuable midtown Manhattan commercial properties. JCMC is a Delaware limited liability company with its principal place of business in New York. Joseph Chetrit is JCMC’s principal and has over thirty years of experience in the real estate business. See Defendants’ 19-a Statement (“Def. 19-a”)2; Plaintiff’s 19-a Response Statement (“Pl. 19-a”)3. Defendant Princeton is a New York limited liability company and Defendant Joseph Tabak is Princeton’s Chief Executive Officer. See Def. 19-a1. Although not expressly stated, it appears that the parties are all regularly involved in the acquisition and development of real estate.A. The Letter AgreementsIn 2011, Princeton entered into a series of transactions (collectively the “Letter Agreements”) to acquire, with a third party, 50 percent of non-party Michael Ring’s interests in fourteen Manhattan properties (collectively the “MR TIC Interests”).1 See Def. 19-a6. Pursuant to the Letter Agreements, Princeton had the right to acquire the MR TIC Interests for the aggregate purchase price of $112,500,000. See Comp.11. In accordance with the Letter Agreements, Princeton deposited $10,066,082.03 in escrow to secure its rights under the Letter Agreements. See id.12.The fourteen properties consisted of mixed-use buildings, aggregating approximately 1,000,000 square feet located in the Midtown South, Chelsea, and Flatiron areas of Manhattan (hereinafter the Ring Portfolio). See Def. 19-a7. Michael Ring owned a 50 percent interest in thirteen of the Ring Portfolio Properties and only a 25 percent interest in one of the other properties, 251 Park Avenue South. See id.8. The remaining interest was owned by Michael Ring’s brother, Frank Ring. See id at6. While the Ring Portfolio was owned by Michael and Frank Ring, the properties were left vacant and in a state of disrepair. See Def. 19-a11.B. The Ring Arbitration and LitigationShortly after the Letter Agreements were executed, Michael Ring attempted to unilaterally terminate the Letter Agreements. See Def. 19-a12. As a result, Princeton and non-party The Bluestone Group commenced litigation and arbitration proceedings against Michael Ring to enforce the Letter Agreements. See Pl. 19-a12. On April 18, 2012, the Arbitrator issued a Partial Final Award (the “First Arbitration Award”), holding, inter alia, that the Letter Agreements were a “binding and enforceable agreement” and directing the parties to “negotiate final LLC Documents in good faith, proceed to a Closing and notify the Arbitrator to the extent there are further disputes requiring resolution.” See Def. 19-a14; See also Santolli Affirm. Ex. 21 at 16. Ultimately, the Arbitrator issued three additional partial final awards, the last of which was issued on October 12, 2012. See Def. 19-a27.On May 31, 2011, Princeton commenced an action to confirm the First Arbitration Award in New York Supreme Court, captioned Princeton Holdings LLC v. Michael Ring & the Broadsmoore Group, LLC, Index No. 651483/2011. See id at16; see also Santolli Affirm. Ex. 25. Michael Ring cross-moved to vacate the First Arbitration Award. See Def. 19-a16; see also Santolli Affirm. Ex. 26. However, the motions were never resolved by the Court, as the action was discontinued with prejudice pursuant to the parties’ Stipulation of Discontinuance, dated June 18, 2013, filed by Extell Development Company (“Extell”) and Michael Ring. See Def. 19-a17, see also Santolli Affirm. Ex. 73.C. The Contribution AgreementFollowing the First Arbitration Award, Princeton began contacting parties in the commercial real estate industry about a potential transaction involving Princeton’s interest in the Ring Portfolio. See Def. 19-a19. On August 7, 2012, Princeton and JCMC entered into a contribution agreement (“Contribution Agreement”). See id. at21. JCMC paid Princeton $12.5 million and deposited an additional $1 million for expenses. See id at43. In return, JCMC received an assignment of the $10.1 million Princeton had paid as a deposit to secure the Letter Agreements. See id. At the time the Contribution Agreement was executed, Princeton was still engaged in the Ring Arbitration and Ring Litigation. See id.25.Defendants argue that JCMC would become a 50 percent partner with Princeton if Princeton closed on the acquisition of the MR TIC Interests and if JCMC paid the product of $460,000 multiplied by the Acquired Percentage Points under Section 2(b)(iv)(A) of the Contribution Agreement. See id at32. Acquired Percentage Points were defined as “the number of percentage points of the MR TIC Interests acquired by the Company, directly or indirectly (including through one or more entities) on the Closing Date pursuant to the Letter Agreements and any Remaining Interest Agreements.” See Def. 19-a33; Santolli Affirm. Ex. 1 §1.D. Princeton Assigns Its Rights Under the Letter Agreement to ExtellOn December 6, 2012, Michael Ring and Extell entered into an agreement relating to a potential settlement transaction with Princeton; Extell agreed it would acquire Princeton’s interest in the Portfolio. See Def. 19-a
57-58. Around the same time in December 2012, Princeton and Extell began discussions regarding a potential settlement for the Letter Agreements. See Def. 19-a57; Pl. 19-a57.2 In January 2013, Extell, through its President Gary Barnett, offered Princeton $65 million for a payout with Michael Ring. See Def. 19-a
