Another Milstein suit.

Milford Plaza Hotel prompts more litigation 

Citing family relationships that are "strained to the breaking point," one side of the feuding Milstein family is asking the courts to intervene in the sale of the Milford Plaza Hotel at 270 W. 45th St.

"Despite pervasive indications of a potential down-turn in the commercial real estate and hotel market, and a consensus among the partners that the time is right to sell the hotel, the parties have been unable to agree on a method to accomplish such as sale," according to court documents.

Seymour Milstein, along with his son Philip Milstein and daughter Constance Milstein, filed the suit March 29 asking the court to supervise the sale. A partnership -- comprising members of both sides of the Milstein family -- was dissolved just hours before the suit was filed. The lawsuit suggests that the court consider appointing a neutral party to oversee an auction of the property, as the family has done in the past with disputed property.

In a March 30 letter responding to the request for court intervention, Edward Milstein, one of the defendants in the suit, said "your insistence on seeking court intervention, rather than allowing us to negotiate a sale, not only may result in less aggressive bidding for the hotel, but makes absolutely no sense given the fact that you have previously admitted that, under Howard's sole discretion, the hotel's value has skyrocketed."

"On two separate occasions, Howard Milstein at Paul Milstein's direction, negotiated transactions for the Milford Plaza Hotel, each worth more than $250 million, which would have maximized the value of the hotel for the family," the letter states.

The court action is the latest in a series of Milstein family squabbles that have pitted the families of brothers Seymour and Paul Milstein against one another. The brothers, who now both live in Scarsdale, first went to work for their father's flooring business almost 60 years ago. The Paul Milstein side of the family includes his sons Howard and Edward Milstein, and daughters Roslyn Milstein Meyer and Barbara Milstein Zalaznick.

When a feud over how to develop a 40,000 SF parcel on 42nd Street and Eighth Avenue could not be resolved earlier this year, the court ordered that the property be sold by auction. Judah Gribetz was appointed by the court to oversee the process. In January, Paul, Howard and Edward Milstein submitted the highest bid at $111.1 million for the site and plan to build an office tower. The parcel, which is currently being used as a parking lot, is the last piece in the Times Square redevelopment puzzle.

As they have in the past, the Seymour Milstein side of the family places the blame for the feud on Howard Milstein. In the March 29 lawsuit they claim that; in recent years as Paul has been less active in management of the family business, Howard has tried to "exercise unilateral control over the family's holdings."

"He refuses to consult with plaintiffs regarding partnership business, he refuses to involve plaintiffs in material decisions and commitments affecting the partnership, he refuses to provide plaintiffs with information affecting the partnership, and he refuses to recognize the principle that he cannot unilaterally effect an extraordinary transaction without the consent of all of his partners," according to the suit.

The Milford Plaza Associates partnership was formed in 1978 to oversee operations of the hotel. Under the partnership agreement, Seymour and Paul Milstein each own a 20 percent stake in the hotel and each of their children owns 10 percent.

In 1998, Howard Milstein tried to negotiate a sale of the Milford Plaza Hotel to investor Philip Pilevsky and, then in 1999, he entered into negotiations with Bernard Goldberg concerning a 99-year lease of the hotel. Howard did not consult the partners in either instance, the suit contends.

In the March 30 letter, Edward Milstein accuses his uncle and cousins of wanting to generate publicity, rather than resolve the issue.

"If there could be any doubt about your true motivation, we learned that you provided a copy of your March 29 letter to the New York Times and the Daily News, even before you sent a copy of it to our side of the family. With Paul in South Africa and Howard in San Francisco, why would you be rushing to dissolve the partnership with such urgency?" the letter states.