Two groups who have previously clashed with developer Michael Shvo have joined forces in a new lawsuit, accusing him of orchestrating a yearslong civil RICO conspiracy. The suit was filed by the Core Club and its founder and CEO Jennie Enterprise, along with two residents from Shvo’s Mandarin Oriental condo project at 685 Fifth Avenue in Manhattan.
The plaintiffs allege that Shvo, together with a German government-backed pension fund and other partners, misled investors, condo buyers, tenants, and business associates into multi-million dollar deals. According to the complaint, “the proceeds of which were diverted to enrich Shvo and his associates, and to fund their lavish lifestyles.”
The lawsuit outlines the formation of BSD, a partnership between Shvo, pension fund BVK, Deutsche Finance Group (both named as defendants), and Serdar Bilgili’s BLG Capital. The suit claims BLG Capital exited after suspecting “millions of dollars in improper expenses” charged by Shvo. Allegations include charging personal expenses such as private jet travel, a $30,000-per-month apartment lease, and yacht work to the partnership responsible for projects in New York City and San Francisco.
This legal action follows a recent court decision requiring Core Club owners to pay nearly $1 million to Shvo over a 2022 loan dispute.
A lawyer representing Shvo described the new case as “a desperate attempt” by Core owners “frantically trying to avoid paying more than $3.5 million in owed rent,” adding that “a third-party audit had already probed their claims about expenses.”
The complaint also describes deteriorating relations between Core Club and Jennie Enterprise. After being approached by Shvo in early 2020, Enterprise agreed to move the club’s headquarters to one of his buildings at 711 Fifth Avenue in New York City. She also signed leases at another property—the Transamerica Building—and executed agreements that could give Shvo up to half ownership of Core.
Shvo reportedly promised funding for an expansion plan involving clubs in New York City, San Francisco, and Milan—projecting revenues of $159 million by 2030—and said he would contribute $100 million toward these efforts. However, according to the lawsuit: “despite Shvo assuring Enterprise that their interests were aligned,” he was set to receive a $27 million fee if Core signed a lease in New York.
Core ultimately signed leases at properties owned by Shvo in both cities during 2021; they later took out a $1 million loan tied to an option allowing an entity linked with Shvo to purchase half of Core’s membership interests.
The plaintiffs claim that promised clubs outside New York were never intended for completion—calling them “fake” projects—and say even the New York headquarters was delivered late and incomplete. They cite incidents including an elevator entrapment involving a member and injuries caused by collapsing beams.
Other allegations include giving complimentary memberships (valued at $100,000 each) to himself and close associates; forcing Core Club staff to host multiple private events; verbally abusing employees; and causing financial strain on the club that triggered his right under contract terms to buy half its membership interests—with November 21 proposed as closing date.
John and Diane Goodman—the other plaintiffs—repeat earlier accusations made against Shvo regarding their purchase of a unit at Mandarin Oriental for $6.1 million. Their previous lawsuit claimed unfinished amenities; while claims against Shvo personally were dismissed by court order (but not those against his development entity), they filed another suit alleging further problems like unfinished shared spaces and poor building conditions.
Recent reports indicate fewer than one-third of units have sold since launch four years ago; last year saw only 15 units sold despite securing substantial inventory financing.
In this latest filing, the Goodmans add claims about burglaries affecting their unit as well as pest infestations traced back through vacant apartments’ plumbing systems. They also accuse Shvo of using building facilities for personal events—including hosting a late-night concert by Greek singer Antonis Remos inside the restaurant last June.
Responding previously on behalf of Michael Shvo regarding these lawsuits: attorneys called them “a kitchen sink of frivolous claims” designed as “a public hit job.”
