432 Park Avenue Lawsuit: 1,500 Defects and Fraud Claims

The 432 Park Avenue lawsuit is actually two lawsuits, both filed by the condominium board against the developers of the Billionaire’s Row tower. The first, filed in September 2021, alleges more than 1,500 construction and design defects and seeks at least $125 million in repair costs. The second, filed in April 2025, accuses the developers of a “deliberate and far-reaching fraud” to conceal widespread cracking in the building’s white concrete facade and seeks at least $165 million more, plus punitive damages.¹²

The 2021 Case: More Than 1,500 Defects

The Board of Managers of the 432 Park Condominium filed suit on September 23, 2021, in New York Supreme Court against the sponsor entity, 56th & Park (NY) Owner, LLC, and seven individual employees of CIM Group and Macklowe Properties. The case is indexed as No. 655617/2021. An engineering firm hired by the board identified more than 1,500 defects in the building’s common areas, and the board sought at least $125 million to repair them.² One trade publication reported the total damages sought at more than $250 million once additional claims were counted.³ Board attorney Jonathan Adelsberg said the figure could keep rising, calling the investigation “peeling an onion.”

The timing followed a shift in control. The sponsor had controlled the condo board under the building’s offering plan until November 19, 2020, when unit owners finally took majority seats. The new board investigated, then sued.⁴

The alleged problems ranged from serious to bizarre. Residents reported being trapped in elevators that stalled because of the building’s sway. Flooding and water infiltration affected at least 35 units and common areas, and an investigation traced 2018 leaks to poor plumbing installation, including loose bolts buried under insulation. In July 2021, a contractor drilling through concrete hit live electrical wiring, causing an “arc flash explosion” that knocked out power and cost $1.5 million in emergency repairs.⁵³

Noise was among the worst complaints. The building’s sway produced creaking, banging, and clicking so pervasive that some owners moved out because they could not sleep during storms. The complaint said a trash chute sounded “like a bomb.” Other defects included cracked drywall, peeling baseboards, misaligned joints, malfunctioning sliding doors, window condensation, and repeated circuit breaker tripping. The building received an energy efficiency rating of D, the lowest possible grade.⁵⁶

The complaint also accused Harry Macklowe of using his seat on the sponsor-controlled board to steer repair contracts to McGraw Hudson Construction Corp, a firm he owns, and alleged the work was shoddy and in some cases caused further damage.⁴

The 2025 Case: Fraud Over the Facade

On April 25, 2025, the board filed a second, separate 46-page complaint in Manhattan Supreme Court. It names Harry Macklowe, CIM Group, McGraw Hudson Construction Corp, SLCE Architects, and WSP as defendants. The board had tried to fold the new evidence into the 2021 case, but a judge denied that request, requiring a fresh filing.¹ The board seeks at least $165 million, plus punitive damages and compensation for depressed property values.⁷

The claim centers on the building’s load-bearing exoskeleton of white reinforced concrete. The specialty Portland cement mix was designed to keep a white luster as it cured, with compressive strength requirements of 14,000 psi on lower floors and 10,000 psi on upper floors. The lawsuit calls that mix “experimental” and inadequate for a tower with a 15:1 height-to-width ratio.⁸⁹

According to the complaint, internal emails show that people on the project understood the risks early. A WSP engineer warned the project had only two options: “color or cracks.” Jim Herr of Rafael Viñoly Architects wrote in a 2012 email that “they are going down a dangerous and slippery path that I believe will eventually lead to failure and lawsuits to come.” The board also alleges pre-construction mockup tests showed the chosen material would crack, and that the developers pressed on anyway.⁸⁹ The board’s lawyers say they built the case after reviewing seven million pages of documents and conducting 100 days of depositions.¹⁰

The alleged cover-up begins with the sealant. Engineers recommended a thick coating of elastomeric paint to block air and water. Macklowe rejected that, the complaint says, because an opaque coating would change the look of the building for buyers. He allegedly proposed using a clear silicone material from his personal yacht, arguing that if it was “good enough for his yacht,” it was “good enough for the Building.” A product called Silicane was applied to the exterior in October 2015, shortly before the building opened.¹⁰

A 2016 survey identified 1,893 defects, according to the complaint, and the board alleges the defendants failed to disclose the full findings. The suit specifically accuses McGraw Hudson and WSP of sending a letter to the New York City Department of Buildings that “misrepresented the nature, extent, and type of cracking” in the facade. The offering plan was allegedly modified more than once, including a change that said the concrete was “designed to” prevent water penetration rather than that it “will” prevent it.⁹

By the 2025 filing, the board described the facade as plagued with thousands of severe cracks, spalling, and other deterioration, including a crack ten inches deep in the building’s core. More than 20 water leaks have occurred since 2017, and the board alleges moisture has corroded the steel rebar reinforcing the concrete columns.⁹

Who Is Named, and Who Isn’t

The 2021 suit is against the sponsor entity and seven individual employees of CIM Group and Macklowe Properties. The sponsor then brought in the engineering and construction firms as third-party defendants, including WSP (both its structural and MEP divisions), SLCE Architects, Lend Lease, and CGI Northeast Inc.⁵ The 2025 suit names Macklowe, CIM Group, McGraw Hudson, SLCE, and WSP directly.¹

One name is missing from both. Rafael Viñoly, the tower’s designing architect, died in 2023 and is not a defendant. The complaints reference warnings from his office during design, but the legal claims target the developers and the engineering and construction firms that allegedly went along with the decisions.¹⁰

What the Developers Say

CIM Group and SLCE Architects have “vehemently” denied the fraud allegations. CIM’s chief strategy officer, Jami Schlicher, said the company “categorically denies the allegations” and would move to dismiss.⁷ Macklowe’s representatives have previously called claims about cracking “vastly exaggerated.”¹⁰ McGraw Hudson and WSP did not respond to press inquiries about the 2025 filing.⁹

Where the Cases Stand

Both suits are active as of late 2025. CIM Group and SLCE Architects are moving to dismiss the 2025 fraud complaint. In the 2021 case, breach of contract claims against WSP remain pending. Earlier, Justice Melissa A. Crane of New York Supreme Court dismissed the sponsor’s professional malpractice and common-law indemnification claims against WSP in June 2023, and the Appellate Division, First Department, unanimously affirmed that ruling in May 2024.¹¹

The board is now represented by Terrence and Darren Oved of Oved & Oved LLP, who replaced its prior counsel. The Oveds said in a public statement that their goal is “to hold defendants accountable for their malfeasance” and to restore the building “to its rightful place as one of the world’s premier residential addresses.”¹² No trial date has been publicly reported for either case. Inspectors have said the tower is safe for residents and pedestrians, though engineering experts have estimated a full facade renovation would run into nine figures.¹³

Effect on Resale Values

The litigation has already showed up in listings. Every one of the nine units on the market at the time of reporting had undergone a price cut, and several were listed below what their owners paid.¹⁴ Examples include:

An 81st-floor unit listed at $17.25 million after a 2016 purchase of $21.15 million, an 18% discount. The owner, Turkish designer Naciye Kocak, was sued by JPMorgan Chase in 2022 after defaulting on an $11.4 million mortgage, and a $12.2 million judgment was entered against her.
A 94th-floor unit bought in 2019 for $31.5 million, listed at $29.75 million.
Two 71st-floor units bought together in 2018 for $60 million, each now listed at $32 million.
A 69th-floor penthouse bought in 2016 for more than $60 million combined, listed at $55 million.
A 35th-floor unit previously sold for $18.11 million, listed at $15 million.

¹⁵

1
6sqft. 432 Park Owners Sue Again Over Alleged Facade Crack Cover-Up
2
Habitat Magazine. Condo Board Sues 432 Park Ave. Sponsors for $125 Million Over Defects
3
ENR. NYC Supertall Tower Condo Board Sues Over Alleged Construction Design Defects
4
Bloomberg Law. 432 Park Condominium Complaint
5
NYCourts.gov. Board of Managers of the 432 Park Condominium v 56th and Park (NY) Owner, LLC
6
Wall & Ceiling Online. Owners Say Cracked Walls and Ceilings Plague Billionaires Row Tower
7
Realtor.com. 432 Park Avenue Condo Lawsuit Billionaires Row
8
ENR. NYC Billionaires Row Tower Could Need $160M Fix Amid Cracking
9
CNN. 432 Park Avenue Skyscraper Lawsuit
10
Curbed. 432 Park Avenue Lawsuit Crack Facade Fraud Billionaires Row
11
NYCourts.gov. Board of Managers of the 432 Park Condominium v 56th and Park (NY) Owner, LLC, 2024 NY Slip Op 02865
12
New York Post. Condo Owners at 432 Park Ave. Sue Its Developers Once More
13
New York Times. 432 Park Avenue Condo Tower
14
Realtor.com. Tequila Billionaire Has Explored Listing 432 Park Avenue Condo for $90 Million
15
New York Post. Turkish Designer Seeks to Sell 432 Park Home for a Loss