Flagstar Bank has not been happy with billionaire landlord Joel Wiener.
The bank has accused Wiener to misunderstand his property and to dispute the expert assessments of their value. The allegations have slightly stimulated some of the problems that could come to the Israeli bond market, which Wiener tapped on cheap financing.
Flagstar did the allegations in a bankruptcy case in which Wiener’s 82 real estate agencies were involved, which, according to judicial documents, owe more than $ 1.1 billion to Flagstar and Israeli bond holders. Together the companies check 93 apartment buildings in New York and more than 5,200 units.
Wiener’s entities want to use rental income to cover their operating costs. But Flagstar has made a strong objection. The properties have not paid their mortgages since January and many are confronted with shielding. The bank said in May that it is serious concern about where money is going, and wondered whether Wiener’s role “simple mismanagement of the property of the debtors included, or worse.”
A lawyer for Wiener gave no comment for this article. Flagstar did not respond to requests for comments.
Flagstar has also collected alarms about the fund flow at the companies. The companies paid Israeli bond holders $ 12 million, the bank claimed, not paying their mortgages.
“Significantly defective and not credible”
Wiener was one of the first real estate players in New York to use the Israeli bond market for financing, so that more than picking up $ 500 million. His bankruptcy case has emphasized another player on that market: Michelle Zell, an appraiser for Bowery Valuation.
Zell, who says that she has a value of property for Israeli bond expenditure of more than $ 1 billion, serves as the expert of the companies in the bankruptcy case. In the case of the 93 New York buildings in Wiener’s portfolio, she has argued that the property is worth more than their fault.
The Flagstar expert doubts the provisions of Zell and calls her report “considerably defective and not credible.” Appraiser Scott Fowler from Ankura Real Estate Advisory said that her report was based on “non -supported, incorrect or inappropriate data.”
Zell’s answer was submitted under seal, but the judge in the case said that “she was” a well -qualified valuation expert who generally presented reasonable analyzes. ” She did not respond to a request for comments for this story.
New York Real Estate Dealmakers who used on the Israeli bond market saw in particular various standard settings in the past decade.
Brooklyn -developer Yoel Goldman was the subject of a criminal investigation in Israel after his entire annual management was unraveled under high leverage, which declared bankruptcy. He reached a settlement with the Israel Securities Authority, but was allowed to raise money in the country for five years.
Starwood Capital attracted a Class Action right of Israeli pensioners for alleged misleading investors after it had established a bond of $ 254 million. Starwood said the allegations were merit, but agreed to the appointment of a recipient, according to Costar.
In a separate non -related case, Zell is confronted with direct allegations that she has abused ownership. Investment company Saluda Grade claimed that it bought a loan of $ 13.7 million for an apartment complex with 40 buildings in Southeast Texas after Zell and a colleague appreciated it at $ 18.4 million. But as soon as the borrower had failed, Saluda Grade got a second opinion. That assessment placed the retrospective value of just $ 5.8 million, a difference of 68 percent.
“The assessment was so bad that the appendor of the appraiser of the appraiser only inspected one building from the forty buildings that were the development that was assessed!” The lender wrote in his complaint.
Elsewhere in the bankruptcy case, Flagstar has the efforts of the companies to pay management costs to other companies controlled by Wiener. Experts say that wage costs are unusually high at the property entities in the LLCs, according to judicial documents.
“Debtors pay 4% management costs to an insider, although their own expert assumed that a reimbursement of 3% was more typical,” a judge wrote in June.
In June, a federal court denied the efforts of the Wiener’s companies to use rental contacts to cover costs, and said that Flagstar’s interests were not protected as a secure creditor. But he insisted at Flagstar to work out something with the companies on interim basis, since the living conditions of thousands of tenants were on the line. The parties have agreed to use cash for a period of a few months.
Read more
Joel Wiener’s Pinnacle Group places 5K units in bankruptcy
Joel Wiener’s Bankruptcy Proses: Interest rates
How Pinnacle’s Joel Wiener became a real estate billionaire
#Flagstar #focuses #Joel #Wieners #Portfolio #Management #ratings