Tory Burch Leads Pierre Resident Lawsuit Over Proposed $2B Sale

Celebrity residents of the storied Pierre Hotel have filed suit against the building’s co-op board, alleging that it is secretly negotiating a sale that would force residents to move out.

The luxury building overlooking Central Park has long been the home of some of New York City's richest celebrities, including former Disney CEO Michael Eisner and former Paramount and CBS owner Shari Redstone. 

Fashion mogul Tory Burch, another Pierre resident, is among the plaintiffs in the suit, filed last week in New York Supreme Court, asking a judge to force The Pierre's co-op board to open its financial records and disclose its negotiations with a prospective buyer. 

Despite multiple attempts to obtain the ownership entity’s records and books about the proposed sale, co-op residents were ignored, the suit says.

"Over the vehement objections of many residents who have no desire to leave, the Board, under the sway of the Sale Proponents and their outside advisors, has insisted on pushing forward with its sale agenda while keeping shareholders utterly in the dark about the process," the lawsuit says.

The Khashoggis, a prominent Saudi family, and a hotel company owned by the sultan of Brunei have agreed to pay $2B to purchase and redevelop the building, The New York Times reported in September. The lawsuit confirms the buyers and the price.

"The Board has refused to provide the most basic information about the mystery buyer and the status of negotiations, declining to even provide a copy of an exclusivity agreement it signed with the proposed buyer or confirm when that agreement was signed," Burch's affiliate, Autumn River LLC, and seven other plaintiffs claim in the suit.

The property, a 41-story hotel and co-op building with 77 residential units at 2 E. 61st St., has fraying carpets and often-broken elevators, and it had been in dire need of renovations for at least two years, according to The New York Times. The landmark was built in 1930.

Taj Hotels, an Indian luxury chain, manages the hotel’s day-to-day operations and is responsible for building maintenance. It also provides co-op residents with the same services as guests, including room service and daily cleaning, Curbed reports.

The co-op board had started considering renovation options in 2023, telling residents that it was negotiating a lease renewal with Taj that would require the hotel operator to make further investments in the building, in addition to previous renovations.

It also claimed to be seeking out competitors to Taj in case the operator didn’t agree to maintenance responsibilities, according to the suit.

But this year, the board has been single-mindedly pursuing a sale, the suit alleges, based on claims that neither Taj nor its competitors would foot the $300M in estimated repair costs.

Howard Lutnick, former Newmark chairman and Cantor Fitzgerald CEO and current secretary of commerce, bought the building's largest unit in 2017 and never moved in, the Times reported. Lutnick, who volunteered Newmark’s services in 2023 to procure a refinancing, would have the largest say in whether a sale goes ahead. 

The offer was formally revealed at the annual meeting of the co-op's shareholders on Sept. 17, when owners learned that the co-op board had executed a term sheet with the Khashoggi family and the Dorchester Collection, according to the suit.

The deal would require all of the building's residents to move out within a year, but the board never did its due diligence and was unaware of the would-be buyer’s identity, the suit claims. 

"Not even the Board’s five-member majority has full information regarding the negotiations," lawyers for the plaintiffs wrote.

Attorneys for the plaintiffs and a Newmark spokesperson didn't respond to Bisnow's requests for comment.