Courts roundup: Bluestone sues Mack over $116M foreclosure; Goldman Sachs sues Joel Schreiber for $20M
535 West 27th Street (Credit: Google)
Bluestone sues Mack over $116M foreclosure: The Bluestone Group, the mezzanine lender on a 1-million-square-foot portfolio, claims senior lender Mack Real Estate Credit Strategies did not notify Bluestone that it was going to file a foreclosure action against the borrower entities, contrary, the complaint states, to an inter creditor agreement. Bluestone seeks specific performance of the agreement which, the complaint says, provides Bluestone with a purchase option.
The suit is based on a refinancing of a 1 million square foot portfolio controlled by lumber yard and strip club owner, Robert Gans. In 2018, Mack provided $130.2 million of senior financing, which was cut back to $116.2 million. Bluestone on September 21, 2018, provided a $17.76 million mezzanine loan that “almost immediately went into default,” the complaint says. The initial maturity date for the mezzanine loan was October 1, 2020.
In August 2021, an entity that claims it stepped into the ownership position for at least one property in the portfolio, 535 West 27th Street, sued Mack, claiming it was not fully informed and did not give consent for the loan. Mack, in response papers, claims the entity is an affiliate of Tabak, and was therefore fully aware of the financing.
Then in October, Mack filed to foreclose on the entire portfolio and the $116 million loan, as PincusCo reported at the time.
Bluestone claims that Mack, “In commencing a foreclosure action (without prior notice to Plaintiff or issuance of a clear and unequivocal Purchase Option Notice), Defendant has violated and breached its obligations to Plaintiff under Sections 10 and 11 of the ICA, necessitating a judicial determination to clarify the status of Plaintiff’s rights and obtain enforcement thereof. Senior Lender is, was and remains obligated to provide Plaintiff with separate and independent notice with respect to commencement of a foreclosure action even if Plaintiff previously declined to exercise a purchase option with respect to an earlier acceleration of the mortgage debt.” LINK
Court filings represent the positions of each party and are not necessarily accurate or complete.
Goldman Sachs sues Joel Schreiber for $20M: Goldman Sachs alleges it make a $20 million personal loan to Joel Schreiber secured by an interest in Schreiber’s in WeWork stock. Schreiber was identified as the earliest outside investor in WeWork. In addition, Schreiber founded the real estate firm Waterbridge Capital. According to the complaint, the loan terms said if the value of the stock drops to where Schreiber’s $20 million loan represented less than 25 percent of the stock value, he must pay down the loan so that it does not pass the 25 percent level.
Michael Fox, an attorney representing Joel Schreiber, said in an email that, “Schreiber has been absolutely transparent with Goldman Sachs. The complaint has several misstatements about any disposition of We Work stock. They acknowledge this in their complaint. We expect to be able to resolve our differences in the near term.