Core Club's Finances Under Fire In Ongoing Dispute With Landlord Shvo

An exclusive club for New York City’s elite is facing questions over whether it can pass its own admission test. 

Core Club, which charges as much as $100K a year for memberships, has spent nearly two years in a heated legal battle with its landlord, Michael Shvo. In seeking to evict the club, the developer said in a new legal filing that the club has misrepresented its financial health.

At the crux of the dispute is a question of who owes whom. In 2024, Core filed a $600M lawsuit against Shvo, claiming he promised to invest $100M to build out five-star, turnkey locations in New York City, San Francisco and Milan. In exchange, he would get a 50% stake in the business.

Core alleges that Shvo never delivered on his side of the deal but still used the club’s facilities, racking up $80K in various charges that went unpaid. In response, Shvo claimed that Core’s accusations were an attempt to avoid paying its obligations. The club is allegedly in default on over $3.5M in rent. 

In September, a judge granted a Yellowstone injunction, preventing Shvo from evicting Core while the default dispute is ongoing. That ruling hinges on Core maintaining its ability to pay back any rent a judge may determine it owes, as well as staying current on the lease while the lawsuit makes its way through court. 

In a Sept. 10 filing, Core owner Jennie Enterprise again affirmed that “CORE Tenant and its affiliates have the financial bandwidth from revenue generated by dues, management fees, services, events, and other sources, including potential financing, to cure the purported default.”

But now, lawyers for Shvo are questioning whether that is true. 

In August, Core settled a fraud case with the U.S. Attorney for the Southern District of New York. Prosecutors charged Core with improperly receiving more than $4M in Covid-era relief funds intended for small businesses, including from the Paycheck Protection Program. 

Originally, Core would have had to pay more than $8M to settle the case, but the amount was reduced to $360K, to be paid over five years, based on an assessment of the business’ financial records. 

The settlement states that if Core’s net worth is higher than what it disclosed to the government by $18K or more, officials can choose to collect the “full Settlement Amount plus one hundred percent (100%) of the net value of Defendants’ previously undisclosed assets.”

In a document filed in New York County Supreme Court on Wednesday, Shvo accuses Core of telling federal prosecutors one thing and the judge in its case against the landlord another. 

“These representations — the first to the SDNY, and the second to this Court — cannot both be true,” Shvo attorneys wrote in the landlord’s latest plea to evict the tenant.

When asked for comment, a spokesperson for Shvo referred Bisnow to the court filings. 

In a statement, Core’s attorney, Marc Kasowitz, called the motion “another meritless attempt to manufacture a default where none exists.”

“Shvo’s latest attempt to relitigate issues the Court has already addressed will fail, just as his others have,” Kasowitz said. “Shvo’s motion falsely claims that Core violated the Yellowstone order, but Core is current on rent and has fully complied with the Court’s directives.”

Additional details about Core’s past financial circumstances have come out in the Justice Department’s latest release of filings related to Jeffrey Epstein. The financier, who was indicted for sex trafficking before his death and previously convicted of soliciting a minor for prostitution, was revealed to have paid Core $100K as a founding member and would regularly receive treatments from the club’s spa, The Wall Street Journal reported.

Enterprise would regularly ask Epstein for financial advice, according to emails published by the DOJ. In a 2012 email — years after Epstein's conviction — she told the financier the club was sometimes operating in the red.

Beyond rent, in court records, Shvo has claimed that the only formal contract he signed with Core was for $46M in build-outs at its New York and San Francisco locations. The $100M investment was allegedly only in a nonbinding term sheet, and there was no mention of a Milan club.

The club is further responsible for overspending $10M in construction costs, Shvo has alleged.

Shvo has also attempted other ways to kick the club out of the top floors of 711 Fifth Ave., where it is currently operating. The landlord tried to remove the club’s staff from the building’s lobby, stating he previously allowed Core employees to be stationed there voluntarily — it was never written into a lease. 

Now that the two are engaged in a protracted legal tussle, Shvo claims that Core’s staff creates security issues for the building because they do not check the IDs of those who enter. Instead, information is stored in their own system, saving members the nuisance of having to provide identification each time they arrive. 

A judge ultimately ruled that Core’s security must check members’ IDs before allowing them into the elevators. But in the latest filings, Shvo’s lawyers allege that, in an act of “flagrant disregard for this Court’s prior order,” the club’s employees have not been doing so.

Shvo had already won one battle in his war against the club. In a countersuit, he claimed the club defaulted on a $750K loan he provided when the Fifth Avenue location opened. In August, a judge ruled in favor of the developer, ordering Core to pay nearly $1M. 

At the same time, Shvo has been caught up in a separate quarrel with one of his primary financial backers, Bayerische Versorgungskammer. In December, the German pension fund revealed it stands to lose more than $1B on its investments into Shvo’s real estate projects. It has been exploring ways to remove him as the manager on those projects, it said in a statement.

“This filing appears less about any legitimate lease dispute and more about distraction,” Kasowitz said, pointing to the disclosure.