Madison 92nd Street members seek dismissal, cite agreement violations

By Caroline Salls

Pittsburgh, Aug. 23 - Madison 92nd Street Associates, LLC's co-managing member Robert Gladstone and three of its members asked the U.S. Bankruptcy Court for the Southern District of New York to dismiss the company's Chapter 11 bankruptcy case, according to a Tuesday court filing.

As an alternative to dismissal, Gladstone and members Lucille Gladstone, John Lesher and Andrew Harris asked the court to appoint a Chapter 11 trustee or examiner to oversee the bankruptcy proceedings.

According to the motion, co-managing members 92nd St. Hotel Associates LLC, which is controlled by Louis Taic, and JKNY, LLC, which is owned by Jeffrey Kosow, filed the bankruptcy case "without corporate authority in direct contravention of the provisions of the debtor's operating agreement.

The movants said these co-managing members have knowingly violated the operating agreement because Hotel Associates reneged on its commitment to sign a fully negotiated $86 million stalking horse sale contract under which creditors would have been paid in full and equity would have received a significant return.

Robert Gladstone and the three members said Hotel Associates reneged in an attempt to squeeze them to sell their membership interests at a steep discount.

In addition, the movants said the co-managing members secretly signed a financing term sheet that attempts to remove them entirely from ownership of Madison 92nd Street's sole asset and wanted to complete an illegal hostile takeover of the company by attempting to remove Robert Gladstone from his position as co-managing member and replace him with Kosow through a special meeting of the members.

"The actions taken by the alleged co-managing members have no legal effect, and the petition they signed falsely represents to the court their status and authority," the motion said.

Madison 92nd Street is a New York-based hotel owner. The company filed for bankruptcy on Aug. 16, and the Chapter 11 case number is 11-13917.

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