Russian Hedge Fund Manager Settles Plaza Penthouse Suit

Feb 5 2009 | 12:30am ET

Peace has been made in the battle of the Plaza penthouses. The Russian hedge fund manager and the redeveloper of the landmark New York hotel have reached a settlement, and the hedgie has apparently even bought one of the apartments in question, although more as an investment than as a home.

Andrei Vavilov, a former Russian deputy finance minister, had originally planned to buy a pair of penthouses at the Plaza. But in September, he sued the redeveloper, El-Ad Group, alleging that the finished spaces were nothing more than “glorified attic space” and not the palatial estate in the sky he thought he was getting for $53.5 million. But last week, Vavilov and El-Ad, which had countersued the hedge fund manager alleging Vavilov had made “defamatory and untrue” statements, reached a settlement. No details were provided, by Vavilov’s lawyer, Y. David Scharf, said he and his client were “very pleased with the outcome.”

The settlement was reached on Jan. 27. According to public records, the smaller of the two apartments Vavilov went to contract on sold the same day to a Hayling Island Inc. That company, presumably named for the resort island on England’s south coast, may be one of Vavilov’s companies, as The New York Times reports that he is the buyer. And he seems to have gotten something of deal: The six-room penthouse sold for $11.1 million; Vavilov had agreed in February 2007 to pay $14 million.

The fate of the second, larger penthouse, which Vavilov had agreed to pay $39.5 million for, is unclear. Public records indicate that it has not yet been sold. But if in fact Vavilov is the buyer of the smaller pied á terre, he certainly doesn’t seem to plan to move in: The 2,906-square-foot apartment has been listed, with the hedge hoping to turn a quick profit: He’s seeking $12.5 million for the place.

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