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NYC's biggest foreclosure halted as new creditor emerges

[NEW YORK] New York's biggest-ever foreclosure auction, for a penthouse at the One57 luxury tower near Central Park, has been halted after a new creditor emerged saying it's owed money - for about US$83 million worth of gasoline and jet fuel - by the owner of the apartment.

Unit 79 at the Billionaires' Row tower - bought in 2014 for US$50.9 million - was scheduled to be sold at auction tomorrow, in a seizure forced by a Luxembourg lender seeking to recoup an unpaid US$35.3 million mortgage. The US Justice Department intends to collect any remaining proceeds, claiming the owner bought the condo with illicit gains from Nigerian crude-oil sales.

For now, the auction of the 6,240-square-foot penthouse is canceled, according to Mark McKew, the New York lawyer appointed to handle the sale. Debt collector Campion Maverick Inc filed papers in federal court in Florida on July 3 seeking to force the owners of the apartment, Earnshaw Associates Ltd and One57 79 Inc, into bankruptcy as a way to recover an unpaid tab of US$83.1 million for gasoline and jet fuel.

Both of those shell companies are linked to Kolawole Akanni Aluko, a Nigerian businessman accused by the US of receiving contracts with his country's state-owned oil company after bribing a government official. Aluko and an associate lavished that official, Diezani Alison-Madueke, with millions of dollars worth of artwork, furniture and London real estate, according to a lawsuit filed July 14 by the Justice Department's Kleptocracy Asset Recovery Initiative.

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The businessmen failed to abide by the terms their contracts, yet were permitted to sell more than US$1.5 billion worth of Nigerian crude oil, according to Justice Department documents. They then used the proceeds to go on a global luxury spending spree, according to the lawsuit. Aluko's purchases include the apartment at One57 and an US$80 million yacht called the Galactica Star that the US is also trying to seize.

Aluko's other assets include three private jets, 58 cars and luxury real estate in Los Angeles and London, according to court filings last year in Nigeria's Federal High Court, which sought to freeze Aluko's holdings across the globe.

The debt collector's filing in Florida seeks to force Aluko's shell companies into bankruptcy as a way of paying back a debt owed to an Ivory Coast petroleum supplier. Aluko, using his own name, signed a debt-settlement agreement in 2012 with the company, according to court filings in Florida. In 2015, that debt was then guaranteed by Earnshaw, the sole shareholder of One57 79 Inc, which is listed New York City public records as the owner of the Manhattan penthouse that was scheduled for auction.

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