Courts roundup: Chetrit claims Yoel Goldman owes $12.6M; Churchill claims financing snub
Meyer Chetrit claims Yoel Goldman owes him $12.6M
Meyer Chetrit, a principal of the Chetrit Group, claims Yoel Goldman, founder of All Year Management, owes $12.6 million after failing to repay a portion of a loan provided in late 2019.
The filing alleges Goldman gave Chetrit a note on November 26, 2020, outlining a debt of $19.35 million which was due on July 10, 2020. The loan was intended to repaid in four installments due January 10, 2020, March 10, 2020, May 10, 2020 and July 10, 2020.
The papers do not tie the debt to any property or particular investment, nor do the papers mention any company, just the two individuals and the money allegedly owed.
Goldman by the March 10 date had repaid $7.7 million but made no further principal payments, the papers say. Since the loan was considered in default on May 11, a 24 percent default interest rate was triggered, which the filing claims amounts to $7,770 per day.
The amount now due is calculated as $11.7 million in principal plus interest totaling $908,408, plus interest that continues to accrue daily.
The filing is a proposed judgment by confession, which lays out the original loan in a “confession of judgment” that Goldman signed in November 2019.
Churchill seeks fee after Flushing developers borrowed $49M from other lender
The investment and financing firm Churchill Real Estate claims principals of a Flushing development project reneged on an agreement to pay a break-up fee in the event it closed financing with another firm, according to a lawsuit filed December 24 in New York State Supreme Court. The developers borrowed $49 million from another firm in a deal that was recorded the same day, December 24.
The suit claims there was a breach in contract, alleging the Flushing group approached Churchill in October 2020 to finance a loan not to exceed $44.6 million and on November 3 signed a letter of intent which included a break-up fee provision and a non-refundable deposit. The suit claims the developers and the guarantors chose another lender and have refused to pay the break-up fee, which is 0.5 percent, according to the suit.
The fee would be approximately $223,000, which is 0.5 percent of $44.6 million, but the figure was not noted in the suit.
This lawsuit is the opinion of one party and may or may not be accurate. The Flushing team has not yet responded in court to the filings.
Churchill claims that on November 20 it had gone so far as to have “called capital,” meaning it had secured funds for the loan.
Then on December 7, Churchill notified the Flushing group it was ready to close, but Flushing said it would seek financing elsewhere. The suit claims a letter from Flushing on December 21 said it would not pay the break-up fee.
It is not unusual for lenders to require a break-up fee provision so that it will be compensated for the time spent structuring the financing. The break-up fee is a requirement may come as the deal has advanced to a letter of intent stage, said one source not involved in the financing or the dispute.
$11.6M Tribeca commercial condo loan to B+B Capital in pre-foreclosure
The lenders on an $11.56 million loan secured by four commercial condominiums at 377-379 Broadway in Tribeca filed a suit December 23 seeking to foreclose on the loan. The condos, owned by B+B Capital, were for many years the home to a Keller Williams brokerage.
The court filing is 850210/2020, and was filed in New York State Supreme Court.
Ilan Bracha and Haim Binstock’s B+B Capital acquired the four condo units in June 2014 for $10 million. They leased the space to an affiliate of Keller Williams, which the two owned at the time.
The loan was increased from $7.5 million in 2014 to $11.75 million in 2015 and was then placed into a commercial mortgage-backed security.
The suit claims the rent was reduced without the consent of the lender and the borrower was notified in August 2019 that the loan was in technical default. The lender states it is foreclosing on the loan because the change in rent triggered a technical default. The case does not cite nonpayment of rent as a cause for the pre-foreclosure filing. The current amount due is $11.56 million, according to the suit.
This pre-foreclosure case, as in all court filings, is the opinion of the plaintiff and the facts may or may not be accurate. Bracha and Binstock have not yet filed response papers.