Lender drops $170M foreclosure case at Gaw’s Standard High Line

Wells Fargo, the trustee for bondholders of a $170 million loan given to Gaw Capital Partners for the $340 million purchase of the Standard High Line Hotel in 2017, yesterday discontinued its effort to foreclosure on the building at 848 Washington Street in the Meatpacking District in Manhattan.

The lender withdrew the complaint, as well as a motion to appoint a receiver and the lis pendens on the building. The move comes several weeks after the parties sought a filing extension for the receiver motion, citing, “ongoing settlement negotiations between the parties.”

The stipulations of discontinuance do not provide any information on how the parties intend to resolve the loan default.

In August 2022, the lender won an interim decision in federal court as it pursued the foreclosure of the loan, which it declared in default in June 2020 as the pandemic restrictions forced hotels to close their doors. Wells Fargo, through the special servicer CWCapital Asset Management filed the pre-foreclosure action on behalf of CSAIL 2017-CX10 in U.S. District Court in Manhattan on November 1, 2021. LINK

Goodwin Gaw, who leads Gaw Capital, is a real estate investor based in Hong Kong. Forbes estimates his family has $1.75 billion in assets. Gaw Capital, according to Forbes, manages $33.6 billion in assets.

The Real Deal reported at the time of the foreclosure filing that Gaw Capital claimed Apollo Global Management, holds a stake in the debt, was refusing to engage in “good faith negotiations.”

Gaw Capital in December 2021 said that Apollo Global Management and Triangle Capital Group acquired in June 2021 an 18 percent stake in the debt that was the “control note” which allegedly put them in the drivers seat, more than a year after the loan was declared in default, in May 2020.
According to the December 2021 answer from Gaw Capital, “Apollo and Triangle’s conduct continued with a “take it or leave it” attitude and the proposal of outrageous and unconscionable terms that they knew would never be accepted by any borrower and then, shortly thereafter, the commencement of the instant foreclosure action.”

But an attorney for the lender asserted in 2021 that Apollo had no ability to control the foreclosure case. ” Borrower has thus failed to point to any authority or evidence to support its bald assertion that the Note B-B holder [Apollo] directed or attempted to direct the initiation of this action—and no such evidence exists in the record.”

Direct link to Acris document. link