Ownership of Manhattan’s iconic Flatiron Building is still up in the air after the surprise winning bidder at last week’s auction failed to follow through on a $19 million deposit that would have guaranteed his sole ownership of the building, which has been vacant for years.

Last week, the private equity firm known as Abraham Trust came out on top of a whirlwind auction that was initiated as part of a lawsuit brought against the building’s minority owner, Nathan Silverstein, by his partners to determine who takes over the sole controlling stake and can therefore decide its future.

As reported by the Commercial Observer, the firm subsequently missed the deadline to make its required 10% deposit on the property it bought for $190 million by Friday. This will set off a ripple effect, as the partnership that originally brought the suit and placed second in the auction is apparently declining its option to make the purchase at their final bid of $189.5 million. The result of their decision means that another auction must be held in Manhattan at later date.

The Real Deal pointed out that the case illustrates the challenges and pitfalls of the antiquated Tenacy-in-Common (TIC) designation. TICs are harder to partition than buildings managed under LLCs or limited partnerships, which was one of the points of contention that led to the lawsuit against Silverstein in 2021.

“In investment property, it is a very unwieldy thing,” an attorney for the majority partners told TRD, speaking of the Flatiron dilemma. “You tend to only see it as a legacy of something that was seen long ago.”