The Real Deal New York

Miami Beach developer fights $10M NY judgment

January 22, 2014 03:42PM
By Eric Kalis

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Ophir Sternberg, Michael Feinstein and Alan Kluger

From left: Ophir Sternberg, Michael Feinstein and Alan Kluger

From the South Florida site: Miami Beach developer Ophir Sternberg is embroiled in heated litigation over a mortgage obtained for an old New Jersey real estate investment, The Real Deal has learned.

Sternberg is contesting a $10 million judgment awarded to Barouch Saar in New York in 2011, according to Miami-Dade Circuit Court records. The judgment, which stems from an $825,000 loan Saar gave to Sternberg in 2002 and the accrual of monthly interest at a 2 percent rate, was moved to Miami two years ago.

The Circuit Court case is still playing out, and an appeal from Sternberg on an order to produce certain corporate documents is pending at the Third District Court of Appeal, also in Miami.

An attorney for Sternberg blasted the interest rate as “usurious” and said a filing in New York asking for the judgment to be recalculated is imminent.

The loan given to Sternberg was a second mortgage for an apartment complex in Newark, N.J., when the developer was in the early stages of his career. Sternberg currently runs Miami Beach-based real estate investment and development firm Lionheart Capital.

Saar, who is from Israel, claims he has not received any money back from Sternberg for the loan. That’s why the amount owed skyrocketed between 2002 and 2011.

Attorney Michael Feinstein, who represents Saar, told The Real Deal he’s surprised Sternberg has not made more effort to resolve the dispute.

The $10 million judgment “is a debt that any prudent business person would want to get off their books sooner [rather] than later,” Feinstein said.

Sternberg referred questions about the cases to Miami attorney Alan Kluger, who strongly disputed Feinstein’s assertion that the developer has not made significant attempts to repay Saar.

“He has offered on numerous occasions to pay the legitimate debt that he owes,” Kluger told The Real Deal. “They want millions of dollars.” He said they intend to return to the New York court, where he expects the interest will be recalculated. Once that happens, “we intend to pay the full amount of the judgment.”

The true amount owed to Saar is “in the neighborhood of” $1 million, Kluger said.

In the Circuit Court case, Feinstein subpoenaed several corporations tied to Sternberg last fall in an effort to establish a direct connection between the companies and the developer. Sternberg’s attorneys filed a motion for protective order to prevent having to comply with Feinstein’s request, but Miami-Dade Circuit Judge Victoria Sigler denied the motion. The led to the Third District Court of Appeal filing, in which the companies asked the appellate court to reverse Sigler’s ruling.

Appellate court records identify 2700 North Ocean, Lionheart Capital, Oz Holdings of Miami, Lionheart Singer and Z Real Estate Holdings as the appellants in the case.

Feinstein filed an answer brief in the appellate case on Friday. He claims the companies currently have no basis for an appeal and asks for Sigler’s ruling to be affirmed and be remanded back to Circuit Court.

Lionheart’s current projects include the Ritz-Carlton Residences Singer Island, Palm Beach and the Ritz-Carlton Residences, Miami Beach. The company opened the sales center for the Miami Beach project, which is planned for the former Miami Heart Institute property, last week.

  • David Brown

    If they are filing in NY I believe there is no maximum interest rate on loans above $250K on anything other than one or two unit houses (capped at 16%) or any amount to other corporations. It is criminal (loan sharking) to charge more than 25%. So 2% a month or 24% per year appears legal in NY under both civil and criminal laws. It may be that NY laws aren’t applicable (property in NJ, filing in Florida). In New Jersey I believe the rate is 30% (50% for loans to corporations).

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