Benefit Street sues Toby Moskovits, Michael Lichtenstein for $29M

Lender Benefit Street Partners seeks $29 million it alleges Toby Moskovits and Michael Lichtenstein owe through a guaranty, following the Quadrum Global purchase of the Williamsburg Hotel at 96 Wythe Street out of bankruptcy last month for $96 million.

The transfer price was $96 million, but the Benefit Street lawsuit said of a total payoff due of $117 million, Benefit Street was paid nearly $88 million leaving an alleged deficit of $29 million. Benefit Street Partners filed the lawsuit Friday in New York State Supreme Court.

Court filings represent the position of one party and are not necessarily accurate or complete. Moskovits and Lichtenstein have not yet responded to the case.
The full guaranty was triggered by the “bad boy” act of filing bankruptcy, according to the complaint. Benefit Street, a division of Franklin Templeton Investments, provided the loan with an original principal of $68 million to Moskovits and Lichtenstein’s Heritage Equity Partners for the development of the hotel. The Real Deal has written extensively on Heritage Equity Partners litigation.
The two developers have been mired in approximately 30 court cases over the past several year, according to the filing.
The court filings says, “Plaintiff received $87,972,165 from the recent sale of the mortgaged collateral (The Williamsburg Hotel), leaving a Debt deficit of $29,097,331.90, which Moskovits and Lichtenstein must pay under the Guaranty.”
According to bankruptcy court-appointed examiner Eric Huebscher in the 21-22108, “The investigation uncovered evidence of a complex scheme to divert and siphon substantial amounts of money from the [borrower].”

Court LINK

Direct link to the property’s ACRIS page and link to DOB NOW portal.