12:00 am, March 23, 2009
Issa in contempt of court over building in Buffalo
By Simon Binns - Crain's Business News Manchester


Manchester-based developer Bashar Issa has been found in contempt of court in the US for violating a receivership order on a building he owns in Buffalo, New York State.

Issa was found in contempt by State Supreme Court Justice John Curran last week in connection with a lease he signed allowing a tenant — London-based AAMS Investments Ltd — to take over 10 floors of the 18-storey Statler Towers, despite it being under the control of a court-appointed receiver.

Curran, however, has given Issa a chance to reverse the ruling by proving the tenant is genuine, as little is known about the company.

AAMS Investments was only incorporated on February 16, 2009 and has one director, Abdullah Alshohail, who is also the sole director of another company established on March 4, called AAMS Capital Ltd.

Both companies have registered offices at 21 Knightsbridge Court on Sloane Street in London.

The tenants were only being charged $1 a year in rent for 350,000 sq ft but would have been liable for about $100,000 a month for utility bills, running costs and repairs.

The lease also carried a £500,000 “finder's fee” for Issa's father, Mohmoud al Issa.

Curran has given Issa and his BSC Development Buffalo LLC until April 6 to resign the lease and said there was “an assumption that there is no tenant-in-waiting”.

BSC is also responsible to make the immediate payments for AAMS if the tenant is unable to, said Curran.

“This could be a case of "Be careful what you wish for, Mr Issa',” said David Pfalzgraf, the attorney who filed the receivership application on behalf of a Statler Tower tenant. Pfalzgraf told The Buffalo News: “Thanks to the court, we'll see if he has a tenant or not.”

William Koessler, owner of Statler tenant Park Lane Catering, said: “The pressure is now on (Issa) to produce or face the consequences.”

Issa did not attend the contempt hearing, but was represented by local attorney Andrew Miller. In a statement read to the court, Issa said he “did not knowingly violate the receivership order”, adding: “I anticipated that the AAMS lease would have reduced, or possibly eliminated, the Statler Towers' operating deficit.”

Mohmoud al Issa holds a $4.5m mortgage on the Buffalo building and is threatening to foreclose on the debt, which would entail him taking legal action against his son.

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