A jury verdict allowing the US government to seize a midtown Manhattan office tower belonging to Alavi Foundation was thrown out on Friday by a federal appeals court, which cited several errors by the trial judge.
The 3-0 decision by the 2nd US Circuit Court of Appeals in Manhattan is a defeat for the Department of Justice, which went to trial hoping to sell the 36-story building at 650 Fifth Avenue, perhaps for close to $1 billion.
Jurors had found in June 2017 that the nonprofit Alavi Foundation, which had a 60% stake in the partnership that owned the building, violated US sanctions imposed against Iran in 1995 because it knew that the 40% owner, Assa Corp, was a front for an Iranian state-owned lender, Bank Melli.
But in Friday’s decision, Circuit Judge Richard Wesley faulted trial judge Katherine Forrest, who is now in private practice, for “a troubling pattern of errors on relatively straightforward issues.”
“We are obviously pleased,” Alavi’s lawyers Daniel Ruzumna and John Gleeson said in a joint statement. “All we have ever wanted and asked for is a fair shake.”