Last month, a court ordered Maverick Real Estate Partners to pause a potential foreclosure on the Gorham Building. That protective shield for ownership is gone.
This week, a judge denied an injunction to prevent foreclosure of 390 Fifth Avenue in Midtown Manhattan, Crain’s reported. The decision opens up the door for Maverick to start proceedings against Fred and Robert Schwalbe.
It’s a quick reversal for the Schwalbes. Last month, the borrowers scored a temporary win that saw the court halt any foreclosure. They accused a Maverick affiliate of using “vulturous tactics” by agreeing to take a $400,000 fee to settle the issue of a $41 million debt, taking the money and then refusing to hold up its end of the bargain, according to a complaint.
But this week, the judge in the case said an injunction wasn’t warranted because the Schwalbes couldn’t demonstrate “irreparable harm” by the defendants.
An attorney for the family did not respond to the publication’s request for comment. Neither did a representative from Maverick.
The borrowers owed a $41 million payoff to Maverick due on New Year’s Eve. The agreement included an option to extend the loan, one that the borrowers intended to exercise.
After the borrowers reached out and paid a $200,000 extension fee, however, Maverick allegedly piled on additional requirements. Maverick told borrowers they had to pay $1.5 million in interest shortfall to extend the maturity date, contrary to the loan agreement, the complaint alleges. The parties allegedly agreed to a $400,000 sum instead, which the borrower wired.
When Maverick sent out an extension agreement, that number suddenly became $750,000, according to the complaint. After the borrower sent over more money, Maverick allegedly said it would refuse to extend the loan at all without the $1.5 million and would instead file to foreclose.
The complaint alleged that Maverick had yet to declare an event of default, but nonetheless instituted a full cash sweep, leaving the borrower unable to pay its expenses.
The 140,000-square-foot property is 20 percent vacant. It has been connected with the Schwalbe family since at least 1969, according to public records.
Maverick has earned a well-worn reputation as an aggressive real estate lender, buying up debt to foreclose.
Read more
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