Investor wins case against future AM&A developers for breach of contract | Business premises

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Five years ago, Weiping Cao thought she had found a way to get an immigration “green card” to come to the United States as a permanent resident.

Weiping, a Chinese national, had met Xiaomei “Sally” Lu and Jinneng “Bally” Bao, a married couple from Glen Cove, NY, who were trying to raise funds from foreigners to invest in their real estate redevelopment project – to convert the former AM&A Department Store Building on Main Street in Buffalo into a new hotel.

In March 2017, Weiping invested $500,000 in the project under the federal EB-5 visa program, designed to spur investment in redevelopment projects. She then filed with the United States Citizenship and Immigration Services for conditional permanent resident alien status.

Then, when the project failed and began to run out of cash, she invested another $6.5 million, this time in the form of a loan backed by Lu and Bao, to secure the project. But that still wasn’t enough, and now the project is in limbo, without funding and stuck in litigation. Meanwhile, Weiping is no closer to emigration, let alone getting her money back with the interest she says is owed to her.

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But now a federal judge in Brooklyn is taking his side, at least in part, rejecting Lu and Bao’s arguments that they may not have had the authority to make the loan deal.

As a bitter legal battle continues between two groups of Chinese investors over who owns and can redevelop the AM&A building, U.S. District Court Judge Eric N. Vitaliano in Brooklyn said it’s irrelevant to Weiping’s separate lawsuit seeking to recover its investment from Lu, Bao and Landco. H&L – one of two companies claiming title and ownership of the project.

A legal battle is waged between three upstate investors that has left the future of the historic downtown complex in limbo.

Citing the “precise and unambiguous” language of the signed loan documents, as well as Lu and Bao’s perception and claims of authority at the time, Vitaliano granted Weiping’s summary judgment request for breach of contract and breach. personal guarantees on the loan.

The amount of damages owed to Weiping is yet to be disputed, Vitaliano said, but the ruling is still a setback for Lu and Bao. The couple had unsuccessfully attempted to use a separate dispute in state court over ownership of the building as a defense against Weiping’s claims, claiming the loan agreement would be unenforceable if they lost the another case — even as they argue in state court that they should win.

Vitaliano called this argument “more red herring than shield”.

For Buffalo, however, it’s another chapter in the long-delayed effort to redevelop one of downtown Buffalo’s oldest and best-known buildings, which has remained largely empty and neglected at 377 Main. St. for over 24 years since the last company moved. .

It was acquired in late 2014 by Landco H&L, a Chinese and American investor group based in Flushing, Queens, led by Li “Lily” Li. The group unveiled plans for a $70 million makeover , initially at an unbranded 300-room hotel for Asian tour groups visiting Niagara Falls. This plan for the 375,000 square foot building was later transformed into a general-purpose Wyndham Buffalo hotel, with control of Landco passing in December 2015 from Li to Lu.

But Li claimed that Lu breached the contract by improperly transferring most of his ownership in Landco to Lu’s own company, Buffalo Hotel Management, without Li’s permission. In turn, Li said, this change of control triggered a provision that returned more than half of the shares to Li.

Landco then sold the entire property in late January 2020 for $2 million to Elena Fu Yiyao’s 377 Main Realty. Two weeks later, Landco – back under Lu – sued 377 Main Realty and Li for fraud in the Erie County State Supreme Court.

It was also at this time that Cao filed his lawsuit.

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