Courts roundup: Walter & Samuels seeks $37M from WeWork; $1M commercial loan suit in Bronx

Courts roundup for April 23 to April 25, 2021: There were no real estate bankruptcies and no commercial foreclosure filings.

Walter & Samuels seeks $37M from WeWork: The landlord Walter & Samuels is seeking $37 million from WeWork, claiming the co-working company has defaulted on its lease at 214 West 29th Street in Chelsea and is forcing tenants to relocate, despite those subleases being property of Walter & Samuels, according to the complaint. WeWork “vehemently” disputes the allegations. WeWork signed for seven floors in 2018, according to the complaint. The Real Deal reported at the time the lease was for about 100,000 square feet. According to the complaint, WeWork planned to lease the building to “enterprise” users, meaning large companies. As part of the lease Walter & Samuels invested “tens of millions of dollars” in building out open floor spaces, in part because of the inducement that if WeWork defaulted on the lease, the subtenancies would become the property of Walter & Samuels. The complaint alleges after a stated default, WeWork has been “forcing” its tenants to vacate the property “over their objection,” and move to other location, allegedly in violation of the lease. WeWork wanted to “shrink its footprint” and have Walter & Samuels take back the fourth floor, but the landlord refused and WeWork has allegedly failed to pay January 2021 rent of $498,143 and also did not pay February, March or April. WeWork disputes the landlord’s claim that it can take possession of the subleases. In a letter to Walter & Samuels from April 19, it says, “Initially, Tenant vehemently disputes Landlord’s allegations, in their entirety. However, assuming, arguendo, that some fictional ‘default’ existed, Landlord would still have not have the right to succeed to Tenant’s Member’s Membership Agreements under the Lease, or otherwise, in that, inter alia, Agreements between Tenant and its Members are expressly excluded from any purported right to succeed to agreements that may be contained in the parties’ Lease” LINK

$1M Bronx commercial loan suit: The lender, an affiliate of investor Abraham Heby, provided two loans totaling $1.087 million secured by two adjacent commercial properties in the Bronx and is suing the property owner to recover the debt. The addresses are incorrectly given in the complaint as 394-396 Courtlandt Avenue, but in fact are 694-696 Courtlandt Avenue. LINK