Albert has countersued and accused Michael of fraud, breach of fiduciary duty and misappropriation of trade secrets. He described his brother as a “faithless servant” and bitter ex-employee who tried to hurt the family clothing business by sending customers to a rival store he secretly formed called Ooh La La. Albert alleged Michael took $244,000 in excess distributions out of Alberto Makali.
The feud casts light on a New York real estate family that has mostly stayed in the shadows until now. Neither Michael nor Albert Malekan would comment, nor would their lawyers.
“I’m not telling you a thing. Not one thing. Zero,” said an attorney for Albert Malekan, Stephen Siminou. An attorney for Michael, Mara Levin, answered the phone and said she interrupted a call discussing media strategy to speak briefly to Crain’s New York Business but didn’t call back or return a subsequent call.
The brothers’ suit and countersuit were both filed last year but escaped attention until a bond-rating firm mentioned the legal dispute in a report analyzing the mortgage for a building owned by Albert Malekan that isn’t part of the litigation. Last month a state judge gave the warring parties a January deadline to produce evidence.
Albert Malekan hails from western Asia, according to Alberto Makali’s website. And state court documents indicate that Farsi, the language of Iran, is the family’s native tongue. Albert and Michael’s father, Elyaho Malekan, was an art collector who in 2008 sued a dealer for allegedly making off with an artwork from czarist Russia. Elyaho Malekan said the dealer told him, “They [the Russian Mafia] would kill [Malekan] or members of [Malekan’s] family if [Malekan] made trouble.”
Albert Malekan moved to the U.S. at an unspecified date to study at Columbia University and introduced women’s wear to his brother’s store, according to Makali’s website. Movie star Heather Graham wore an Alberto Makali dress that she said “felt like springtime” while doing press interviews before the Tribeca Film Festival in 2013.
Along the way, Albert “cultivated an eye for design and developed his entrepreneurial spirit” and began investing in real estate 30 years ago. He owns Manhattan properties including 75 Greene St., 466 Broome St., 419 Lafayette St. and 552 Seventh Ave., records show. The city Department of Finance estimates their combined value is about $60 million. The locations of other properties couldn’t be determined because they’re owned by LLCs.
419 Lafayette is a 75,000 square-foot office building whose tenants include M13, a venture capital firm run by Paris Hilton’s husband, Carter Reum. The building recently secured a new $20 million mortgage from Citigroup, and Malekan pocketed $15 million in cash as part of the transaction, bond-rating firm KBRA said in a report last month.
Albert Malekan is the sole managing member or “de facto managing member” of each property and maintains exclusive management, control and operation authority over each, Michael’s lawsuit says.
Michael alleges Albert cheated him and other family members repeatedly. In one example, Albert allegedly allowed Donatella Versace to buy out her Greene Street store’s lease during the pandemic in return for a $3 million payment. But the money wasn’t shared with Michael, who controls a 20% stake in the building along with brother-in-law Shahram Golpanian.
In another case, Albert allegedly allowed beauty retailer Jill Stuart to walk away from its Broome Street store, where it owed more than $500,000 in back rent, in return for a cash payment and the store’s remaining inventory, which was then sold in a different shop run by Albert’s wife. Proceeds weren’t shared with family shareholders, Michael alleged, and Albert mismanaged the SoHo property so badly that it went into default, forcing family members to pay “excessive penalties and interest” in order to avoid foreclosure.
“The above examples do not even scratch the surface of Albert’s misconduct,” alleged Michael, who further accused his brother of “intentionally manipulating books and records to make it look as though the properties are operating at loss.” That, he contended, was done in order to force family members to pony up more cash to lenders or to substantially devalue the buildings.
Michael said Albert has directed his accounting firm to file “fraudulent tax returns” on behalf of the family real estate business. For example, in 2020, the Greene Street building received a $2.2 million lease termination fee but the income was not reflected in the property’s tax return.
“In the event the 2020 tax return was audited by the Internal Revenue Service, taxes, interest and penalties would be levied as a result,” Michael alleged.
