Crown Acquisitions calls servicer tactics ‘predatory’ at $10.2M loan on Gravesend retail

The Chera family’s Crown Acquisitions alleges in a lawsuit filed last week in State Supreme Court in Manhattan that a loan servicer by declaring a default on a loan “where none exists at all,” is engaging in predatory loan practices. Midland Loan Services is the servicer for the $10.24 million loan Goldman Sachs provided on the retail property at 2535 86th Street in Gravesend, Brooklyn, in 2016.

Case LINK
Court filings represent the position of one party and are not necessarily accurate or complete.

Crown Acquisitions owns the property composed of four tax lots, which has been leased to Walgreen’s since 2009. In 2016, Crown borrowed $10.24 million from Goldman Sachs. Later, in 2020, Walgreen’s subleased the entire location to another store.

Neither the lender nor Midland, according to the complaint, objected to the sublease, and Walgreen’s continued to make the monthly payments of about $61,000, which covers debt service and other obligations.

However by a March 6, 2025, letter Midland declared a “cash management trigger event.” Midland, according to the complaint, “stated that the rent under the lease with Walgreen is now being ‘excluded from the calculation’ of Net Operating Income under the Agreement, that Lender is ‘exclud[ing] subleases which the Borrower is not a party to, and that the Walgreen lease no longer meets the definition of a ‘Lease’ under the Agreement.”

According to the complaint, “Unfortunately, Defendants appear to be engaging in a scheme to improperly call a default where none exists and, to make matters worse, wrongfully take Borrower’s money and thereby deprive Borrower of its ability to make its loan payments. Upon information and belief, this is how Midland conducts business — by conjuring up trigger events and defaults to change loan terms, put loans into special servicing, siphon more money in fees, default interest and other expenses from borrowers, and engage in other predatory lending practices.”

Direct link to the property’s ACRIS page and link to DOB NOW portal.