Fortis Property Group The One Seaport condominium project in Lower Manhattan faces more legal issues. This time, it’s over Mezzanine his loan, which the lender claims is fraudulent.
mac real estate Fortis and 161 Maiden Lane Bank Leumi USA, the project’s senior lender, committed fraud in connection with the $66 million loan, one person said. lawsuit submitted on thursday. The lawsuit also names Harel Insurance Company and Valley National Bank, which acquired Bank Leumi. $1.1 billion last year.
The lawsuit also accuses Fortis and co-chairman Joel Kestenbaum of misrepresenting and negligently committing to a financing agreement between Fortis and Mack in September 2018. Lenders are seeking at least $100 million in these respects and a total of $566 million in a series of lawsuits. Includes Fortis projects.
Mack also accused the lender of seeking at least $80 million in damages for breaching the terms of the contract.
Kestenbaum, the loan guarantor, faced the same charges related to collateral provided in the contract, the Wanseaport property itself, and the project’s “intentional physical waste,” according to the subpoena. . Mack is seeking at least $162.5 million in connection with the claims.
The lawsuit alleges that Bank Leumi and Harrell Insurance Company facilitated and facilitated fraud in connection with mezzanine loans. Also, Leumi Bank and Harel Bank committed fraud and breached the contract, and in 2018 he voided both the creditor-to-creditor agreement signed between Leumi Bank and Mack, and an amendment to that document two years later. claims to have
Mack also accused Bank Leumi and Harel of fraud and unfair advantage in connection with a $40 million mortgage and mezzanine loan for a 17-unit, 50,000-square-foot developer it provided to Fortis in March 2020. accusation. Polemas Residences 100 Amity Street, Cobble Hill, according to the subpoena. Fortis, as part of which he purchased a Brooklyn property in 2015. $240 million Deal with State University of New York for 18 buildings that were formerly part of the campus of Long Island College Hospital.
Mack is asking the court to award at least $170 million in compensation arising from these claims and to void or modify the creditor agreement and amendment.
Plaintiffs also declared to State Supreme Court Judge Barry Ostrager that Bank Leumi, as a senior lender, had no payment priority, amended the contract to reverse the priority of payment, and that Mack would not be entitled to any collections. We are asking you to avoid having to pay for Leumi Bank, and Mack will be awarded at least $20 million in damages.
Fortis and Kestenbaum are also being sued over mortgage and mezzanine loans the developer received from Mack in March 2020 for the Polhemus condominium project. The lenders are seeking damages in excess of $33.1 million.
Mack is also demanding damages inflicted on Fortis and Kestenbaum. legal dispute Compensation against Bank Leumi over One Seaport should be paid to the plaintiffs, and payments from litigation held by Fortis or Kestenbaum should be considered unjust enrichment.
Court documents do not include pre-seizure filings or specific details about the defendant’s alleged conduct. Lawyers representing both sides did not respond to requests for comment.
Mack’s lawsuit over One Seaport’s mezzanine loan is the latest in a series of legal and financial issues that have plagued Fortis’ 60-story, 98-unit financial district project since construction began in 2016. Thing.
In 2017, 36-year-old construction worker Juan Chonilo died. Fall from the 29th floor of the project. Choniro had a harness on, but he had nothing on him.
In this case, concrete subcontractor SSC High Rise Construction pleaded guilty to second-degree manslaughter. A year later, a crane operator crashed a bucket of concrete into the building’s 34th floor, causing the concrete to flow onto the street below.
bank leumiput $120 million Non-performing construction loan for a project put up for sale in October 2020. It alleges that Fortis did not honor the loan agreement because the developer stopped paying interest and previously failed to obtain a temporary occupancy certificate for one of his condos in the tower. that year. According to Newmark, the banknotes have not yet been sold.
Later that month, Fortis Sued Bank Leumi and other lenders claimed they broke the deal because they didn’t fully finance the construction loans they agreed to provide. I argued that if I did, I would have to provide funds.
What Bank Leumi aimed for Foreclosure In December 2020, we acquired ownership of a $120 million worth loan tied to this property from Fortis. The lender claimed that his $99.9 million of the $120 million line of credit was extended through mortgages, notes, credit agreements, and loan agreements.
Fortis has replaced Pizzarotti with Ray Builders as the property’s construction manager. Ray Builders left the project in 2021, claiming the developer owed him $6.8 million.
In April of the same year, the city intervened and stopped work on the project without a manager. But construction had already stalled for months. A court in June 2021 approved a temporary trustee to oversee the site and approved the hiring of Engel Burman Construction to secure the site and assess its status.
Fortis and Bank Leumi entered into arbitration to settle their claims last year, but negotiations broke down This year, it was because the parties were “too far apart,” Bank Leumi’s lawyer said at the time.
In February, Judge Ostrager denied Bank Leumi’s motion for summary judgment in the foreclosure action.The trial is scheduled for November 2023, according to court record.