Fortress sues Charles Cohen seeking $28.3M in a alleged carry guaranty

Fortress Investment Group filed a complaint March 14, 2025, in New York State Supreme Court in Manhattan, seeking to recover a $28.3 million carry guaranty allegedly owed related to a $533.65 million loan default. That default resulted in a UCC foreclosure sale that did not satisfy outstanding debts.
A carry guaranty is a pledge to pay the costs of operating the company, but when the obligation to fund those expenses can be litigated, according to an article unrelated to this litigation on the Cadwalader website.

Court cases represent the position of one party and are not necessarily accurate or complete.

Case LINK (The case was filed twice, this is the second LINK)

In March 2024, Fortress filed a complaint seeking repayment of the $533.65 million loan, as PincusCo reported at the time. In October, PincusCo reported Cohen lost the main New York City asset supporting that loan, the ground lease at 135 East 57th Street.

According to the complaint, “In September 2022, the Defendant and his companies (together, “CRE”) consolidated six loans into one via the Loan Agreement, pursuant to which CRE borrowed $533.65 million from the Lenders. In connection with the Loan Agreement, CRE pledged certain collateral and Defendant executed several personal guaranties, two of which are relevant here: an unconditional Payment Guaranty for up to $187.25 million of the Loans plus enforcement fees, and an unconditional Carry Guaranty which guaranteed certain payments under the Loan Agreement… On October 4, 2024, Fortress obtained summary judgment as to the Payment Guaranty. And on November 8, 2024, Fortress conducted a UCC foreclosure auction of certain limited liability interests held by CRE that were part of the equity interests pledged by CRE under the Loan Agreement. Because there remains a significant deficit against the outstanding Loan amount, fortress now brings this action to pursue the amounts owed by Defendant under the separate Carry Guaranty… In June 2023, the Borrowers stopped making payments and the Parties began negotiations of a potential global restructuring of the Loan. This process, which resulted in four amendments to the Loan Agreement, was unsuccessful, culminating in Borrowers’ February 2024 defaults… Fortress brings this action to recover the $28.3 million that Guarantor owes under the Carry Guaranty… The amount of the Guaranteed Obligations due and owing under the Carry Guaranty as of March 14th, 2025 is $28,259,793.20, which sum represents, at present, $13,914,106.24 in PIK interest, $5,256,679.71 in Deferred Amortization Payments, and $9,089,007.25 in unpaid taxes. This amount continues to accrue as Borrowers’ defaults remain ongoing.”

Direct link to the property’s ACRIS page.