From left: Magnum Real Estate Group President Benjamin Shaoul, parking garage at 140 West 28th Street and 146 West 28th Street (property source: PropertyShark)

Developer Benjamin Shaoul filed a $15 million lawsuit last week against
Sovereign Partners and its principals, brothers Darius and Cyrus Sakhai, as
well as troubled lender Brooklyn Federal Savings Bank, claiming they derailed his deal to buy back his defaulted note on a
Chelsea development project at a steep discount.

The suit claims Shaoul worked out an arrangement with former basketball star
Earvin “Magic” Johnson’s real estate investment venture Canyon-Johnson Urban
Funds to pay Brooklyn Federal $13 million to buy
back his own defaulted mortgage on the mixed-use property at 146 West 28th
Street valued at $27.98 million in principal and interest.

Shaoul, president of Magnum Real Estate Group, was an active residential
developer in the boom, building projects such as the Yves in Chelsea at 166
West 18th Street, the A Building at 421 East 13th Street and 636 East 11th Street…. [more]

Investors Bancorp CEO Kevin Cummings and a Brooklyn Federal Savings branch at 81 Court Street

New Jersey-based Investors Bancorp acquired Brooklyn Federal Bancorp for $10.3 million, Long Island Business News reported, while unloading most of Brooklyn Federal’s commercial real estate loan portfolio to a separate, unnamed, real estate investment fund.

Brooklyn Federal is the parent company of Brooklyn Federal Savings Bank, which has five branches in Brooklyn and Long Island and has $470 million in assets and $411 million in deposits. With Brooklyn Federal in tow, investors will have $10.7 billion in assets, $7.2 billion in deposits and 85 branches in New Jersey, Brooklyn, Queens and Long Island.

Brooklyn Federal agreed to the transaction because of the increasing costs of complying with government regulation, such as Dodd-Frank, according to analysts interviewed by LIBN…. [more]

From left: 100 South 4th Street (credit: PropertyShark) and 120 South 4th Street

Two under-the-radar Brooklyn real estate developers are confronting more than
$51 million in personal guaranty and foreclosure lawsuits on five separate loans
doled out in Williamsburg and Greenpoint in 2006 and 2007.

In the largest and most recent legal action, special servicer CWCapital Asset
Management sued the developers, Menachem Stark and Israel Perlmutter, to
recover $29 million lent in 2007 and secured by the seven-story, 74-unit rental
building at 100 South 4th Street, between Berry Street and Bedford Avenue.

In the CWCapital suit filed in U.S. District Court in Brooklyn June 28, the special
servicer claims the pair personally owes the full $29 million because of a Chapter
11 filing the pair entered in an effort to block a foreclosure proceeding in 2009…. [more]

From left: Allen Street Hotel construction photo (credit: Curbed) and a rendering of the project

DAB Group is facing a foreclosure suit at its stalled 16-story Allen Street
Hotel project on the Lower East Side, after the loan was acquired by
Manhattan-based Maverick Real Estate Partners.

Maverick acquired a $5.5 million note from Brooklyn Federal Savings Bank,
after DAB, a Valley Stream, N.Y.-based developer, allegedly went into
default, according to the complaint filed July 1 in Manhattan Supreme Court.

The loan had an initial due date of June 1, 2008, with an optional extension
to December 2008. In August 2008, DAB received an extension until Sept.
1, 2009, with three six-month extensions, until March 1, 2011…. [more]

Investment firm Minuit Partners has ponied up $8.5 million for the discounted debt on a distressed Upper East Side development site on the corner of First Avenue and 89th Street and is planning to take control in a foreclosure. According to the Wall Street Journal, Minuit would hold onto the property, on which three small walk-up apartment buildings currently sit, until the market improves, at which point it will build a condominium tower there of at least 100 units. … [more]