A Russian lawmaker and billionaire mogul is suing the Manhattan contractor he alleges overbilled him for work done to his Time Warner Center apartment.
Vitaly Malkin is also contending that the firm, Katselnik & Katselnik Group, tried to extort a multimillion-dollar contract to build out the space after the Russian senator decided to go with another contractor for subsequent work.
The $600,000 suit, filed Jan. 25 in New York State Supreme Court, states that Malkin hired the contractor to serve as his pre-construction manager — overseeing the initial demolition at the 3,200-square-foot duplex on the building’s 74th and 75th floors.
K&K, a boutique firm specializing in interior construction, has done work at venues such as Harry Cipriani restaurant, Barclays Bank and Aspen Fitness Center.
The complaint alleges that the firm put a $170,000 lien on Malkin’s apartment after performing unauthorized work and overbilling at the site, but offered a deal to make the lien ‘go away’ if Malkin granted K&K the lucrative renovation contract.
“They were acting as our New York rep in connection with this project,” said Joshua Bernstein, a partner at Pryor Cashman and attorney for Malkin. “What we allege in that K&K, seeking an opportunity to make money off a wealthy foreign investor, took advantage of the confidence that had been reposed of him.”
Jeffrey Rea, attorney for K&K said he does not comment on civil litigation. K&K officials were not immediately available for comment.
Malkin originally acquired the property in August 2010, with records filed with the city Department of Finance showing the purchase price at more than $15.6 million. Malkin hired K&K in March 2011 to handle demolition work and by May 2011, and retained the firm as its pre-construction manager.
In October 2011, K&K hired CCS Architecture to design the new interior; however by March 2012, K&K offered to become the general contractor on the renovation. Malkin and K&K were unable to come to an agreement on the terms of the contract, according to court filings. “Their prices were out of whack and they had demands that we were not willing to meet,” Bernstein told The Real Deal.
The complaint states that among its demands, K&K asked Malkin to deposit the entire construction amount into a domestic escrow account. A new invoice was sent on May 30 for $170,000 for a range of construction services, including electrical, carpentry, HVAC, dry-walling and other services that the complaint says were never authorized. The complaint said Malkin contacted one contractor, New York Cooling Towers, and was told an invoice for $27,500 was actually for $10,500 worth of work and that K&K was overbilling. K&K then filed the $170,000 lien in August 2012, which is being litigated in a separate case.
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