Hager faces lawsuit over $17 million mortgage loan from N. Richard Kalikow’s Alpha Capital
November 23, 2009 05:30PM By David Jones
The development site at 421-431 Kent Avenue and N. Richard Kalikow (site photo source: PropertyShark)
Alpha, a firm controlled by Kalikow's Manchester Real Estate and Construction, entered an agreement in October 2007, to lend the $17 second mortgage to Kent Wythe 9th Street, a firm led by Hager and Lax, who was at the time suffering from terminal cancer, according the lawsuit filed Nov. 20 in New York State Supreme Court.
In December 2007, the developer paid $42.6 million for a development site at 421-431 Kent Avenue and 464-474 Wythe Avenue in the Williamsburg section of Brooklyn, with plans to build several apartment buildings there, according to PropertyShark.com records and the complaint.
Hager, president of North Development Group, is one of the leading developers in Williamsburg, with a number of projects ranging from the Aurora to 20 Bayard.
Kalikow is most widely known as one of the original partners in the Manhattan House condominium conversion, before he was bought out after a widely publicized legal battle with investment partner Jeremiah O'Connor.
According to the complaint, Kalikow told Hager and his attorney, Irving Alter, that a personal guarantee by Lax was required for him to approve the loan. But, Lax did not attend any of the negotiations, and Kalikow said he was unaware of Lax's health condition and depended on Alter and Hager to assure him that Lax would be able to fulfill the terms of the loan, particularly the guarantee.
"Hager knew that Lax's personal guarantee, and, thus anything that would render Lax unable to fulfill his role as guarantor, including Lax's health, was material to Alpha's decision to loan any monies to Kent," Herrick Feinstein attorney William Fried, who represented Kalikow, said in the court filing. "Hager failed to mention any reason why Lax would be unable to fulfill his duties."
According to the complaint, Lax's personal guarantee was critical, because his business interests depended upon a "family financial empire" that only Lax could maintain. Lax was the president of Dynamic Diamond and a leading philanthropist in New York and Israel.
Because of Lax's death, the complaint says, the only way to enforce the personal guarantee against Lax, would be to file suit against his estate.
By August 2008, the developer went into default on the $17 million and Alpha accelerated the loan. Lax passed away Nov. 3, 2008. Following the default, the loan was later transferred to Beta Capital, another firm controlled by Kalikow.
In addition, the complaint alleges that Hager hired consulting firm Moseson & Associates, to help get 421-a tax benefits for the project. The developer set aside $100,000 for those services; the complaint alleges those funds were misappropriated.
Kalikow is demanding a judgment of at least $4 million and at least $2 million in punitive damages. The plaintiff is asking for at least $100,000 in damages related to the use of the 421-a funds.
Alter declined to comment as did Kalikow and his attorney.
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Comments
Anonymous
Isaac is a mensch
Comment #1 Posted By: Anonymous 11/23/09
Anonymous
Hager is one of the nicest people I ever met. It's just that, when people loose money obviusly someone else is at fault.
Comment #2 Posted By: Anonymous 11/23/09
Anonymous
Unfortunately, Isaac has managed to fool Mr. Lax into trusting him with his wealth that Mr. Lax has so honestly amassed through hhis entire lifetime....! Nothing has remained of the millions of dollars that Mr. Lax has honestly earned through his diamond dealings....! I promise that If Mr. Lax would have known that Isaac will wipe him out completely, he would have NEVER trusted this FOOL..!
Comment #3 Posted By: Anonymous 11/23/09
Anonymous
Issac was living the high life.......And to no ones surprise.....from money that did not belong to him! what a Shame!
Comment #4 Posted By: Anonymous 11/23/09
Anonymous
#5!!! Honestly earned through diamond dealings. Surely a contradiction in terms?
Comment #5 Posted By: Anonymous 11/23/09
Anonymous
That's all lies... Mr. Lax was the one that ran after Hager to do all this deals - and Mr Lax was the more agressive one between the two , (so this really was a GOOD deal) its just unfortunate for everyone in this industry how the market tanked... Hager is the most beatifull person that you can meet or know. He's a down to earth and a humbled personality
Comment #6 Posted By: Anonymous 11/23/09
The shame here is that people have to come to this point... I personally know Mr. Kalikow, Issac Hager and the late Mr. Lax and his family. I think they're all capable of working this out in a civil and judicial way. All of this gossip and bickering is silly and childish. All of you, please grow up.
Comment #7 Posted By: 11/23/09
Anonymous
Hager is the most beatifull person that you can meet or know. He's a down to earth and a humbled personality A beautiful person? you mean he has good looks...that still does not cover his false and deceitful business dealings! Ask anyone in the williamsburg community....they won't sing his praises!
Comment #8 Posted By: Anonymous 11/23/09
Anonymous
Issac is such a mentch, I dealt with him on a couple of real estate deals and it worked out very good for me so I don't know what the bashers are talking about, they're plain jealous.
Comment #9 Posted By: Anonymous 11/24/09
Anonymous
Did some work for hager he was a very good guy to deal with, paid me on time, wasn't fighting over extras I used to ask him
Comment #10 Posted By: Anonymous 11/24/09
Anonymous
jealous of what? so far Isaac Hager has been one big loser! with several of his sites sitting empty...with liens and lawsuits!
Comment #11 Posted By: Anonymous 11/24/09
Anonymous
Mr hager is a great men his words are real 10000% and all you people are talking because you all wanted the $ that he had or made.. Guys I feel your pain. But stopp talking bs that his is a crook because he naver stole from any in his life. Hager is a good men and all ways will be. And god will help he will get out of this and he will earn millions. Hager I'm wishing great luck and you will have iyh.
Comment #12 Posted By: Anonymous 11/24/09
Anonymous
Hager is a great guy!! All the people that deal with him know that he is a pleasure to deal with, Chaim Lax was a very smart man when he chose Hager as a partner he knew what he was doing, Hager is a honest man, things don't always go the way that is planned in buisness, but all I could say is that Hager would NEVER EVER EVER intentionally hurt anyone!!! Hager, be strong, and you will come thru this stronger and better than ever!!!
Comment #13 Posted By: Anonymous 11/24/09
Anonymous
what i dont understand about personal guarante is . kalikow probabley didnt think the property was worth the money so why lend it ?
Comment #14 Posted By: Anonymous 11/25/09
Anonymous
#14 In the real estate business, Integrity is a much needed ingredient! when a lender considers giving a loan he evaluates the property as well as the person behind the project. Mr. Lax had integrity, and so a banker would want to do business with him. If Hager would not have Mr Lax basking him no one would lend Hager a DIME!
Comment #15 Posted By: Anonymous 11/25/09
Anonymous
i think that this whole story is no ones business, nobody knows all the details, so whats the point just to talk about this...
Comment #16 Posted By: Anonymous 11/26/09
Anonymous
Comment #17 why hide under the rug, if u worked for him give Ur name and company???? I'm joe guttman from First Quality Elec. did lots of work for Issac, and never ever had an issue or problem with him, such a gentleman with class,honesty and professionalism. Even on one project that he didn't sell like he taught he will be, By time (with this economy) he paid me off every single penny till the end, i wish all my costumers should be like him
Comment #17 Posted By: Anonymous 11/29/09
Optimist
Hager, I hope you don't read what all this people have to say. Listen up guys, mark your calenders, in 18 months from now, Hager will be flying way above all of us ... just watch him ... this guy wastes no time ... one day he will be of the city's richest people. If the economy would still be going strong, you would all be ranting how smart he is, right? ... i doubt he lost his senses with the economy.
Comment #18 Posted By: Optimist 12/01/09
dont be fooled
Mr Hager is a nice guy, after all its the real estate crash that makes everyone look bad, Keep smiling Isaac I know you'll get buy this Hatzlacha!
Comment #19 Posted By: dont be fooled 12/08/09