Now the borrower has won a temporary victory, with the court ordering the lender to halt any foreclosure.
The borrower, tied to Hilson Management and the Schwalbe family, owes a Maverick affiliate $41 million. But when the borrower tried to renew the loan, Maverick’s branch allegedly engaged in “greedy tactics” — agreeing to a $400,000 fee to resolve the issue, taking the money and then refusing to honor the agreement, according to the complaint.
Maverick has built a reputation as an aggressive real estate lender that buys debt for enforcement. The allegations in the complaint offer a glimpse into the company’s playbook, including behavior that may go too far in court.
The building at the center of the loan is an early 20th century building known as the Gorham Building, located at 390 Fifth Avenue. According to public records, the building has been associated with the Schwalbe family since at least 1969.
The borrowers owed Maverick a $41 million payout last New Year’s Eve. But the agreement included an option to extend the loan, an option the borrowers intended to exercise.
But after the borrowers reached out and paid a $200,000 renewal fee, Maverick allegedly made additional demands. Maverick told borrowers they would have to pay $1.5 million in interest shortfall to extend the due date, in violation of the loan agreement, the complaint alleges.
The parties instead allegedly agreed on a sum of $400,000, an amount that the borrower transferred.
But when Maverick sent a renewal agreement, that amount suddenly became $750,000. After the borrower sent more money, Maverick allegedly said he would refuse to renew the loan at all without the $1.5 million and would instead file for foreclosure on the property.
The complaint alleges that Maverick has not yet declared an event of default, but has nonetheless initiated a full cash sweep, leaving the borrower unable to pay operating expenses.
The plaintiff’s attorneys, Terrence and Darren Oved of Oved & Oved, said the court’s order sends a message to the defendant that his attempts at coercion will fail.
“Our client’s $50 million claim for damages underlines the significant harm caused by the defendant, harm we intend to repair,” the lawyers said in a statement.
Neither Maverick nor his attorneys on the case immediately responded to a request for comment.
In a letter to the court, Maverick’s lawyers say the plaintiffs have made a “tortured reading” of the loan agreement, which they say clearly requires the interest shortfall paid to secure an extension.
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