The worlds of high-stakes real estate and high-society clubbing clashed explosively this week when the owners of the exclusive Core Club filed a bombshell, $600 million lawsuit against their supposed partner and landlord Michael Shvo.
The lawsuit filed in New York State Supreme Court alleges that Shvo lured the glamorous, business-and cultural-focused Core Club to 711 Fifth Ave. – a building he claimed to own – with “sinister and fraudulent” schemes.
The alleged acts included a sneaky attempt by Shvo to seize control of 50% of the club for $1; failure to deliver on promises to fund and build new club outposts in Milan, Italy, and in San Francisco; and delaying and mismanaging the opening of the new Manhattan club, which caused Core founders and owners Jennie and Dangene Enterprise to have to dip into their own funds.
Membership at the ultra-exclusive Core Club, which occupies 60,000 square feet on the top four floors of the former Coca-Cola building, starts at $15,000 a year and climbs to $100,000 for different levels of access.
Larger and swankier than its previous location at 66 E. 55th St. – where Core Club first launched in 2002 – it draws a cross-section of the city’s political, Wall Street, real estate and legal elite.
Present and past members have included Mets owner Steven Cohen, Kenneth Cole, Tory Burch, NFL commissioner Roger Goodell and financier Anthony Scaramucci.
The suit came as a shock. There seemed to be a love-fest between the married Enterprises and Shvo, whose high-profile office tenants at 711 Fifth include French hospitality firm Accor, Loro Piana and Allen + CO. It’s also home to Ralph Lauren’s red-hot Polo Bar restaurant.
The gleaming facility includes a restaurant called 555, a bar, a speakeasy-style lounge, outdoor terraces, art gallery space, private guest suites and an elaborate spa.
Jennie Enterprise called the Core Club’s opening in October 2023 “a pivotal moment in our story. With this new landmark location, we take our founding vision into a thrilling new chapter.”
But the launch was anything but a thrill to her and Dangene, according to the suit, which was first reported by BisNow NY.
Shvo failed to obtain a Certificate of Occupancy in a timely manner, which forced the Enterprises to spend $800,000 to extend their lease at its previous location, the complaint alleged.
The launch was also allegedly plagued by slipshod construction. Among other claims, “Shvo arbitrarily cut out all strip-lighting installation and ceiling light covers from the project, leaving the club dimly lit and aesthetically unappealing.”
Shvo also allegedly used the club’s restaurant and event spaces for his own private events for which he owes $80,000, including for a child’s birthday party, and further took advantage by extending favors to his wife, Seren, the complaint claimed.
But the heart of the suit is the claim that Shvo reneged on promises to fund a $100 million “grand expansion” of the club in other cities and schemed to improperly seize 50% of the business.
According to the suit, Shvo is merely the property manager of 711 Fifth Ave., which is actually owned by a German pension fund, Bayerische Versorgungskammer (BVK). He allegedly “sought to leverage the resources of BVK to secure a 50% personal ownership interest in Core Club.”
The Enterprises also said that Shvo and BVK colluded in making Core Club sign an “unconscionable” lease at 711 Fifth based on Shvo’s promise to invest $100 million.
Shvo’s lawyer Morris Missry called the suit “a desperate attempt to bail out the owners of Core Club from fulfilling the very clear obligations they committed to in a series of binding written agreements.”
Missry added, “We will not be threatened or pressured into providing rent reductions or other undeserved concessions and will aggressively defend this lawsuit.”
A source said that a settlement could occur sooner than might be suggested by the suit’s brutal language, including a reference to Shvo’s past “felony conviction for tax evasion.” (Shvo paid $3.5 million in restitution in 2018).
The Enterprises and their lawyer didn’t respond to requests for comment.