Buyer sued over $53 million penthouse

NEW YORK Fri Sep 19, 2008 1:10pm EDT

A general view shows The Plaza Hotel during the first day that the hotel is open following extensive renovations in New York March 1, 2008. REUTERS/Lucas Jackson

A general view shows The Plaza Hotel during the first day that the hotel is open following extensive renovations in New York March 1, 2008.

Credit: Reuters/Lucas Jackson

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NEW YORK (Reuters) - The buyer of a $53.5 million penthouse apartment in New York's famed Plaza Hotel who sued, saying the apartment turned out to be "attic-like," is now being counter-sued for lying to get out of his contract.

Russian financier Andrei Vavilov sued the hotel, developers El-Ad Properties and brokers Stribling & Associates this month for breach of contract, fraud, deceptive trade practices and negligence. He demanded the return of his $10.7 million deposit and $30 million in damages.

Vavilov, who said he made the purchase based on a video, claimed that the apartment -- actually two separate penthouses built on top of the Plaza -- has small windows, low ceilings, obstructed views and ugly drainage grates.

But in a counter lawsuit filed on Wednesday in New York State Supreme Court, El-Ad Properties accused Vavilov of libel and filing a "sham" lawsuit. It is seeking $36 million in damages.

"These false and defamatory statements were made ... solely in an attempt to escape the unconditional obligation to purchase such condominium apartments," the El-Ad lawsuit said.

Vavilov and his wife, the Russian actress Maryana Tsaregradskaya, were concerned the penthouses were not large enough, it said.

Their "feigned dissatisfaction" about the condition of the apartment in fact reflected frustration that they were unable to buy additional Plaza penthouses and had been unable to combine the two penthouses, the lawsuit said.

In a statement, Vavilov's lawyer took issue with El-Ad's decision to refer to Vavilov by name, since he had not previously been publicly identified.

"It is ironic that, according to published reports, El-Ad released Mr. Vavilov's name to the press and it now sues him for libel," the statement said.

"The libel lawsuit is truly the 'sham lawsuit' in that it is factually incorrect, legally insufficient and is seemingly being used as a weapon to quell discontent, keep other unhappy buyers quiet and a publicity stunt," the statement said.

The Plaza overlooks Central Park and has inspired writers such as Kay Thompson, author of the "Eloise" stories about a 6-year-old girl who lived at the hotel, and Neil Simon, who wrote the Broadway play and hit film "Plaza Suite." It has been owned by moguls such as Conrad Hilton and Donald Trump.

After $400 million worth of renovations, the Plaza reopened

in March as a mixture of hotel rooms and condominiums. The penthouses for sale were advertised as magnificent "one of a kind" properties.

(Editing by Michelle Nichols and Xavier Briand)

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