The Real Deal New York

Amalgamated sued by fellow lender for $32M at Hudson Heights condo

November 02, 2010 01:00PM

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A rendering of One Bennett Park

Amalgamated Bank is facing a $32 million lawsuit from fellow lender Petra Mortgage Capital, alleging the bank guaranteed funds connected to a foreclosure case against the One Bennett Park condominium in the Hudson Heights section of Manhattan.

According to the lawsuit, filed in New York State Supreme Court Oct. 28, Amalgamated and Petra originated a total of $95 million in loans for the tower, a 23-story high-rise at 33-55 Overlook Terrace. The tower was originally named Fort Tryon Towers, but was later changed to One Bennett Park.

Amalgamated, according to the complaint, was responsible for managing the loan on behalf of itself and Petra, a Manhattan-based commercial real estate lender. Petra funded $32 million of the original $34 million that the borrower, investor Rutherford Thompson, head of Thompson Development, used to pay for the initial development costs, including excavation and renovation of the Ft. Tryon Jewish Center. Under the proposed plan, the synagogue, at 524 Fort Washington Avenue, would be completely overhauled so the developer could build an entrance to the condo on Fort Washington Avenue.

The complaint alleges that Amalgamated was obligated to pay the $32 million back to Petra upon completion of the foreclosure, and that Amalgamated dragged its feet by not enforcing the initial default fast enough.

“Not only has defendant capitalized on every opportunity to stall the foreclosure action’s progress, but has even acted itself to delay and complicate an otherwise straightforward foreclosure action on a piece of largely unimproved land,” Todd Soloway, a partner at Pryor Cashman who represented Petra, wrote in the complaint.

The complaint alleges that Thompson defaulted on the loan starting in February 2008 by committing various breaches of the loan agreement, including the following: failing to pay outstanding principal upon the loan maturity date, incurring mechanic’s liens, failing to pay insurance and failing to pay taxes, thus incurring tax warrants. The foreclosure action was filed in January 2010, according to court records.

Amalgamated officials, Thompson, and Lewis Trippet, the attorney for the developer, were not immediately available for comment. Soloway declined to comment.

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