Queens investor sues to dispute Arch Companies claims over $64M portfolio

By Adam Pincus

In a lawsuit filed yesterday, Queens investor Gal Sela of the Sela Group disputed Arch Companies assertion it made this month in city property records that it had power of attorney over a $64 million three-property portfolio.

Sela’s suit was in response to a “memorandum of restrictions” recorded September 17 in city property records by Arch Companies that claimed the firm had obtained power of attorney of the owner “as well as certain consent and/or approval rights.”

The lawsuit 518077/2020 disputed that assertion.

The attorney representing Arch Companies entity Reyerson 27th Lender, Y. David Scharf of Morrison Cohen, said in an email that “the complaint is frivolous.”

The suit says that Maxim Credit Group which held $47.5 million in loans secured by properties including 29 Ryerson Street and 256 Flushing Avenue in Clinton Hill and 39-35 27th Street in Long Island City, notified Sela it had assigned the senior portion of that debt to Arch on August 31, 2020, totaling $42.5 million. Maxim, according to the complaint, still holds the debt on the remainder of the loans.

No assignment of loan has been recorded in city reccords.

The next day, according to the complaint, Arch declared the loans were in default.

In September 2019 Sela bought the Brooklyn properties for $55 million, and before that on May 28, 2019, Sela bought 39-35 27th Street for $9.1 million.