Courts roundup: Gary Barnett sues partners over $6M sale; Hidrock, Lazar Waldman file actions

Gary Barnett sues partners over $6M property sale: Extell Development founder Gary Barnett sued partners in a Brooklyn investment after they allegedly did not pay him and did not wind down the ownership entity affairs following the $6 million sale of the asset in 2015. Gary Barnett through the entity HP Member LLC owned a 1/3 interest in what were formerly two buildings, 186 21st Street and 190 21st Street. The other members were Yoel Weber and Yoel Leonorovitz, each with 1/3. They sold the property in 2015 for $6 million, but Barnett, though the entity, claims he has never been paid and the affairs of the company have never been wound down, as they allegedly should have been per the operating agreement.

Court filings are the positions of one party and are not necessarily accurate or complete.

According to the complaint, “Upon information and belief, on or about June 2, 2015, Weber and Leonorovitz caused the sale of the 186-190 Property to a third party. Plaintiff was not, at the time, made aware of, nor did it have any advance knowledge of, the sale… In accordance with the 186-190 Operating Agreement, by virtue of the sale of the 186-190 Property, 186-190 LLC automatically terminated and was deemed dissolved… Upon information and belief, rather than liquidate the assets, Weber and Leonorovitz took control of the distribution of the sale proceeds and continue, to this day, to maintain control over all accounting, financial and tax preparation functions.” Barnett is seeking, among other actions, “appointment of a liquidating trustee to wind up the affairs of 186-190 LLC and 4101 LLC and to liquidate, sell and distribute the Companies’ assets according to law…” LINK

Hidrock sues lender over $32.8M loan: Hidrock Properties sued lender Bank Hapoalim over a 2018 loan totaling $32.8 million, secured following the $41 million acquisition of two properties for a development at 140 Fulton Street in the Financial District, Manhattan. The bank sued Hidrock in July to foreclose on the loan. This new action alleges the parties were negotiating to again extend the maturity date, and a May 2022 notice of default was a surprise. According to the complaint, “In the face of Borrower’s reliance, and notwithstanding the parties’ discussions and Borrower’s acceptance of terms set by Lender, on May 19, 2022, Lender sent Plaintiffs a purported notice of default (the “Default Notice”) on account of Borrower’s alleged failure to repay amounts owed under the Note by the Maturity Date… Borrower is entitled to a declaratory judgment decreeing that it is not in default under the Note and Mortgage because the Maturity Date was extended.” LINK

Lazar Waldman sues to block UCC sale related to 5 properties: Lazar Waldman seeks to halt a UCC foreclosure auction related to five Brooklyn properties, all of which are in the midst of pre-foreclosure litigation. The loans on the properties total $9.5 million. The properties are 601 18th Street, 603 18th Street, 20 Starr Street, 1638 Dekalb Avenue and 46 Starr Street. Toorak Capital Partners is the general representative for the several lenders on the properties, according to the complaint. LINK