One other lawsuit has joined the family legal saga surrounding Flatiron Realty.
Steven Ostad is suing his older brothers, Michael and Edward Ostad, alleging the 2 unfairly excluded him from an actual property portfolio and lending enterprise he invested in. Steven additionally alleges his brothers have been skimming cash off their rental enterprise, receiving at some factors “luggage of money.”
The criticism, filed Thursday, is an escalation within the ongoing drama between the brothers. Michael and Edward sued Steven one year ago, and the brothers are facing foreclosure suits on $70 million of debt.
The Ostads collectively run an actual property portfolio of 10 rental properties in Manhattan, the Bronx and Queens, together with a lending arm known as Flatiron Realty Capital.
Steven says he’s been unfairly minimize out of each, regardless of an funding of greater than $6 million in Flatiron Realty. The lending enterprise primarily makes use of funds sourced from institutional buyers, in response to the criticism.
The 2 older brothers, each former urologists, initially sued Steven in April 2025. They hoped to dissolve firms the three have been companions in, hoping to money out, however mentioned Steven was standing in the best way.
The 2 older brothers additionally alleged Steven, who’s a decade their junior, had “a lifelong historical past of significant private points and self-destructive behaviors.” An legal professional for Steven mentioned any points are previously and don’t have any bearing on the present claims.
Now Steven is firing again, saying Michael and Edward have been taking rents in money, conserving them off the books and depositing them into private accounts, artificially deflating property values.
“[T]he Brothers took the money rents for themselves, from time to time actually having luggage of money delivered to them, all to Steven’s exclusion,” in response to the criticism.
The 2 older brothers have additionally mismanaged funds, in response to the criticism, by shifting funds from one rental entity to a different.
“Steven waited a full 12 months after his brothers sued him over the actual property enterprise to deliver his personal affirmative claims on the lending aspect of the enterprise. That was an train in restraint – an train Steven continued by not attaching the images, worker affidavits and financial institution data he already has in his possession to this new criticism,” Christopher Milito of Morrison Cohen, who’s representing Steven, mentioned in an announcement.
Terrence and Darren Oved of Oved & Oved, attorneys for Michael and Edward, denied the accusations.
“Our purchasers reject the criticism’s baseless allegations as a determined and clear money seize which we’re decided to show and defeat,” they mentioned in an announcement.
Learn extra
Ostads v. Ostad: Rent-stabilized distress frays family ties
Ostad brothers face foreclosure suits over $70M in loans
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