Investors Face Equity Risks in Chicago Property Dispute
Owners and partners should scrutinize entity transfer clauses after a $19.5 million investment becomes the subject of a legal fight.
Updated on Oct. 26, 2026 in Corporate Finance
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Moise Lavian has filed a lawsuit in Cook County alleging that Mike Kohansieh misappropriated his $19.5 million equity stake in the 131 South Dearborn Street tower. The dispute follows the transfer of the 1.5 million-square-foot property to an offshore entity before it was sold.
Why it matters
The case highlights critical operational risks for minority investors in large-scale commercial real estate syndications, particularly where complex entity structures and offshore holding companies are used to manage ownership interests.
Moise Lavian claims a $19.5 million investment in the 37-story tower at 131 South Dearborn Street, which was acquired in June for $100 million with a $65 million mortgage. The entity controlling the site was later sold for $6.4 million after lenders seized shares.
The players
Moise Lavian
An investor who claims to have contributed $19.5 million toward the acquisition of the Chicago office property.
Mike Kohansieh
A real estate operator whose firm acquired the tower and is now the subject of allegations regarding equity misappropriation.
Bayerische Landesbank
A German commercial bank that provided the $65 million mortgage financing for the Dearborn Street tower acquisition.
Luzon Group
A real estate investment entity that purchased Kohan Properties Ltd. in October 2026.
Carrie E. Hamilton
A judge overseeing the lawsuit proceedings in Cook County court.
The details
The dispute centers on allegations that Mike Kohansieh breached fiduciary duties by transferring full ownership of the 131 South Dearborn Street holding entity to Kohan Properties Ltd. in the British Virgin Islands. Following the transfer, lenders enforced a default and seized shares, eventually leading to the sale of the entity to Luzon Group and Alpha Gidurim. Investors are now navigating the fallout of an ownership structure that allegedly masked equity shifts to the detriment of minority partners.
Timeline
June 2026: Mike Kohansieh purchased the tower.
July 29, 2026: Moise Lavian signed an updated operating agreement.
October 8, 2026: Kohan Properties Ltd. sold to Luzon Group and Alpha Gidurim.
October 2026: Moise Lavian filed the lawsuit in Cook County.
December 22, 2026: A court hearing is scheduled for the lawsuit.
Market Landscape
This dispute reflects the common risk of opaque governance in commercial real estate syndications, echoing frequent breach of fiduciary duty claims that arise when properties hit financial stress. The case highlights how offshore entity transfers can complicate recourse for minority investors.
Operators entering real estate partnerships must verify that operating agreements include explicit restrictions on entity transfers to offshore jurisdictions. Minority investors should prioritize auditing ownership structures to ensure transparency before capital is deployed.
The takeaway
This case underscores the necessity of maintaining stringent control over equity definitions and transfer rights in syndicated projects. Operators should request regular reporting on entity structures and document all fiduciary obligations to protect their interests if a partner faces debt default.
What happens next
A hearing for the lawsuit is scheduled for December 22, 2026, in Cook County court, which will likely determine the next stage of the litigation.
Further reading
For broader insight on managing property partnerships and equity disputes, review our guide to Corporate Finance.
Source note: This article includes information reported by The Real Deal New York.
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