Croman, a now infamous landlord, allegedly defaulted on a $31 million loan tied to the Upper East Side home he shares with his wife and son. Now the lender is attempting to sell its equity interests in the property later this month, with Croman claiming the process has gone wrong.
It is the latest skirmish in Croman’s legal battle with lenders, who are jointly trying to seize the principal amount of more than $231 million. In the background is his battle with his father, Edward Croman, who hopes to dissolve the family partnerships due to mismanagement.
Steven, Edward and Harriet Croman purchased the building at 12 East 72nd Street in 2002 through a shell company for $5.5 million, according to simultaneous reporting from the New York Times. At the time, the property was a six-story multifamily building just off Fifth Avenue, but Croman was able to move tenants out of the 23 rent-stabilized units and renovate the building into a personal townhouse.
Original plans for the home included two pools, a koi pond, a basketball court, six wet bars and two fireplaces, according to contemporaneous reporting from the Observer from New York. However, it is unclear to what extent these plans have been completed.
The now single-family home is currently assessed at $53 million and measures more than 15,000 square feet, according to city records. In 2023, Croman’s company took out a $31 million loan from Axos Bank, backed by the property, as well as the family’s membership interests in the borrower.
The following year the loan was in default. In a lawsuit, Croman blamed the legal dispute with his father for the inability to pay off or refinance the loan. The lender plans to sell the membership interests in a UCC sale on December 11.
However, Steve and Harriet Croman argue in court that their home is unique and valuable, and that a quick sale process will negatively impact what the lender can recover from the sale. The lender is not properly promoting the property, they said, and is erecting barriers that limit public interest, such as mandatory non-disclosure agreements. They are asking the court to pause the sale and issue a preliminary injunction.
These types of arguments are common in UCC sales and hinge on the requirement that a sale be ‘commercially reasonable’.
The lender in the case, NYC Multifamily Portfolio LLC, is affiliated with Dalan Real Estate. The company bought $140 million in Croman-related loans from Axos Bank last year and has since filed several lawsuits.
An attorney for the defendant did not immediately respond to a request for comment, but told the court that halting the sale is “neither necessary nor appropriate.”
Croman is also named as a defendant in 28 other foreclosure cases, related to loans totaling more than $231 million in principal. Twenty-one of those lawsuits were filed by Orange Owner LLC, affiliated with Bellwether Asset Management. In October, the entity purchased linked loans 49 Croman buildings for $247 million from Flagstar Bank, according to Traded.
Croman is one of the few New York landlords sent to prison for real estate-related crimes. Once named one of the city’s worst landlords, Croman served eight months in state prison in connection with mortgage and tax fraud and paid $8 million in restitution related to tenant harassment allegations.
Matthew Ethan Hearle, an attorney at Goldberg Weprin Finkel Goldstein who is representing the Cromans in the dispute, did not immediately respond to a request for comment.
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