Courts roundup: Pre-foreclosure on Princeton Club and at HFZ retail; Stellar’s OTTO said to hit market

Lender files to foreclose on Princeton Club’s $35.8M debt: An anonymous note holder filed to foreclose on the Princeton Club of New York’s debt, which has an original principal of $35.8 million and is secured by its club house at 15 West 43rd Street, which has 58 guest rooms, a squash court an other amenities. Bloomberg reported the total debt at $39.3 million in an article last fall reporting that the note was for sale through Newmark. Sterling National Bank, the original lender, sold the notes to the new lender 15 West 43rd Street LLC on December 14, 2021, in a transfer that was recorded on June 2, 2022. According to the complaint, “The Borrower is in default under the First Lien Loan Documents for, among other things, its failure to make timely monthly payments due under the First Lien Loan Documents since at least November 1, 2021.”

The new lender is not identified but is in care of an address at 500 Fifth Avenue. Bloomberg reported that a billionaire was bidding on the debt.  LINK

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

HFZ Capital hit with $14.9M pre-foreclosure in Chelsea:  Lender Malvern Bank filed to foreclose on two commercial condominiums owned by Ziel Feldman’s HFZ Capital Group, at 505 West 19th Street in Chelsea. According to the complaint following several forbearance periods, “Borrower failed to timely pay the monthly payment due on January 1, 2021 and each monthly payment due thereafter resulting in an Event of Default under Section 6.1 of the Loan Agreement (the “Payment Default”)… By Notice of Default and Reservation of Rights Under Loan Agreement dated July 8, 2021, Plaintiff, inter alia, notified Borrower and Guarantor of the existence of the Payment Default and DSCR Default. As result of Borrower’s failure to cure the Payment Default and DSCR Default, by notice of acceleration June 6, 2022, Plaintiff notified Borrower and Guarantor that, as a result of Borrower’s failure to cure the Event of Default, Plaintiff declared the Total Indebtedness immediately due and payable and demanded immediate payment in full of the Total Indebtedness. As a result of the foregoing, there is now due, owing and payable to Plaintiff under the Loan Documents: (i) $14,881,298.89 in principal; (ii) accrued and unpaid interest at the Interest Rate and Default Rates; (iii) Late Charges; (iv) Plaintiff’s attorneys’ fees, costs and expenses; (v) Prepayment Premium; and (vi) all other sums provided for under the Loan Documents.” LINK

Stellar’s 197-unit OTTO Greenpoint for sale: A lawsuit filed Tuesday reveals that Stellar Management has announced it intends to sell the 197-unit OTTO Greenpoint, a building it developed that opened in 2018. According to the complaint, “Stellar recently announced that it plans to sell the Otto Greenpoint.” The detail was disclosed in a lawsuit filed by Gene and Paul Pullo, who claim to have a 15 percent interest in the project. The building is located at 211 McGuinness Boulevard in Greenpoint, and the Pullos sold two properties to Stellar for $26 million in 2014. Now they are disputing a calculation Stellar is allegedly using to determine the amount of money the Pullos will receive on the sale of the building, following the announcement the property is to be sold. The Pullos’ accountant estimates Stellar will get an additional $572,741 that is should not receive, due to a complex calculation involving the the sale of a Pullos property in Quogue for $3.6 million at about the same time as the Greenpoint sales. In that transaction, a third-party buyer paid Stellar $3.6 million instead of the Pullos. The Pullos sold 211 McGuinness Boulevard and 308 Eckford Street to Stellar Management, which subsequently built the 197-unit Otto. According to the complaint, “Stellar shall remain a member and MEM is hereby admitted to the company as a member and they shall be the members of the company. As set forth in Exhibit A to the Operating Agreement of Greenpoint McGuiness [sic], Stellar owns an 85% membership interest in Greenpoint McGuiness [sic] and MEM (acting on behalf of Gene and Paul Pullo) owns a 15% membership interest in Greenpoint McGuiness [sic].” Stellar refinanced the building in 2021 with a $113 million loan. LINK