Billionaire real estate executive Charles Cohen will have to immediately cough up roughly $544 million to Fortress Investment Group if the lender wins a lawsuit it recently filed against him.
Fortress, an international investment firm, sued Cohen through its affiliate Fortress Credit Corp. for the funds Monday in Manhattan state Supreme Court and has requested a summary judgment in its favor. The investment firm had agreed to lend up to roughly $534 million to multiple limited liability companies linked to Cohen Bros., Cohen’s namesake real estate firm, of which he is president, in September 2022, and Cohen himself personally guaranteed the loan, the lawsuit says.
The LLCs are linked to Cohen Bros.’ properties including its office tower at 135 E. 57th St., also known as Tower 57, and its Dania Beach hotel near Florida’s Ft. Lauderdale airport, according to court filings.
Loan payments were due starting in September 2022, but the LLCs failed to make about $25 million worth of them this past February, defaulting on the agreement, according to the lawsuit. Fortress then sent a letter to the LLCs and Cohen on March 19 demanding immediate payment of the loans’ outstanding principal and interest, which totaled roughly $544 million, the suit says.
Cohen, whose net worth Forbes estimates at about $3 billion, waived all applicable defenses in the guaranty agreement, meaning there are “no defenses to this action,” the suit claims.
“We’re hopeful that there will be a mutually satisfactory conclusion to this,” said Cohen Bros. Executive Vice President David Fogel. “In the meantime, we’re going to review, respond and defend as appropriate.”
An attorney for Fortress declined to comment on the lawsuit.
Cohen Bros. dates back to the 1950s, and many of its Manhattan properties are the types of aging office buildings that have been particularly hurting since the start of the pandemic amid the persistence of hybrid work and competition from newer properties. The occupancy rate for its 3 Park Ave. dropped to 54% in late 2023, while vacancies rose to 40% at 805 Third Ave., also known as the Crystal Pavilion, according to data from Fitch Ratings.
WeWork also listed Cohen Bros. as an unsecured creditor owed about $3 million in its bankruptcy filing last year. The coworking firm is the largest tenant at 750 Lexington Ave., another Cohen Bros. property that houses the real estate company itself as well.
Eddie Small , 2024-03-26 21:37:43
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