Deutsche Bank sues Swig for $11M
October 12, 2009 05:25PM By Adam Pincus
Kent Swig
German-based lender Deutsche Bank is suing to recover $11.3 million in personal loans it gave to developer Kent Swig at the height of the market.
In the lawsuit -- which was filed on Thursday in New York State Supreme Court -- Deutsche Bank Trust Company Americas claims Swig borrowed $6.8 million in March 2007 in two separate loans and borrowed another $5 million in October of that year. But, according to the suit, the embattled developer defaulted after paying back only a small portion of the loan with $11.3 million still outstanding.
The bank may, however, have to get in a long line of creditors seeking money from Swig, president of development firm Swig Equities. He is fighting creditors on a number of fronts and last month threatened to file for personal bankruptcy if a $28 million judgment tied to Sheffield57 was enforced.
The Deutsche Bank loans represent a little over half of the $20.7 million in personal loans lenders are trying to recover after showering Swig with their largess between April 2006 and January 2008, court records show.
Citibank filed suit July 10 to recover $4.965 million lent to Swig in April 2006.
And on September 21 a fund known as RCG LV Debt IV Non-REIT Asset won a judgment for $3.9 million for $3.5 million in personal loans lent to Swig in January 2008. The judgment included roughly $400,000 in interest.
Swig could not be reached for comment.
Attorney Edward Mermelstein said it was not unusual for lenders to make personal loans to developers during the boom years when the easy cash was used to attract clients.
"When you are out there and your name is all over the place as a very successful developer, lenders will run after you to lend you money," he said, referring to that era of lending.
While Mermelstein has no knowledge of Swig's finances, he said developers might use the loans for anything from funding equity in new projects to buying a boat.
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Comments
Anonymous
Bought right downtown buildings in early 00s. Will be fine in long run.
Comment #1 Posted By: Anonymous 10/12/09
Anonymous
#1, no idea what you're thinking, but it looks over for this guy. Game over.
Comment #2 Posted By: Anonymous 10/12/09
Anonymous
These are personal loans, so they are guaranteed by collateral, right? I don't think he has any wiggle room, short of filing for personal bankruptcy. Of course, I would guess that he could sell off legacy assets, to pay for his debts.
Comment #3 Posted By: Anonymous 10/12/09
Anonymous
this is the tip of the iceberg.
Comment #4 Posted By: Anonymous 10/12/09
Anonymous
Swig is a big waves surfer... It's not a little tide that's gonna scare him...
Comment #5 Posted By: Anonymous 10/12/09
Anonymous
he always looks really handsome in the pics tho
Comment #6 Posted By: Anonymous 10/12/09
Anonymous
He's done.....took a multi-generational family RE business and rode it into the ground in a matter of 8 years - if it wasnt so sad and pathetic, it would be funny.
Comment #7 Posted By: Anonymous 10/13/09
Reset
Remember, bankruptcy isn't the end, its a new beginning. Ol' Kent will be back up to speed in no time, you wait and see. Why I'll bet the banks will be falling all over each other just to lend him more money without collateral, cause he's just such a great guy and a real estate wizard to boot!
Comment #8 Posted By: Reset 10/13/09
Where's Kent?
"Swig could not be reached for comment" did you try Costa Rica?
Comment #9 Posted By: Where's Kent? 10/13/09
Anonymous
Number 8... Fraud is not excused in bankruptcy court
Comment #10 Posted By: Anonymous 10/13/09
Anonymous
I don't think that it's going to be as easy as others seem to re-establish himself, at least in NYC. His character has been identified (deadbeat)- he needs to skidaddle before investigations uncover more than just the amounts owed. Switzerland?
Comment #11 Posted By: Anonymous 10/13/09
Anonymous
He is FINISHED - its nice to ride waves, but he is being drowned by the receding water....no one has ever come back from this kind of disaster.
Comment #12 Posted By: Anonymous 10/13/09
Anonymous
As you judge so will you be judged! Most of you are clueless about what is going on with this guy!
Comment #13 Posted By: Anonymous 10/13/09
Approach The Bench
Judge? Kent's going to be standing in front of quite a few of em..
Comment #14 Posted By: Approach The Bench 10/13/09
Anonymous
okay, tell us 13.........
Comment #15 Posted By: Anonymous 10/13/09
Anonymous
"Most of you are clueless about what is going on with this guy!"...REALLY? Seems quite clear - his debts exceed his assets - not very complicated
Comment #16 Posted By: Anonymous 10/13/09
Anonymous
Why doesn't he just sell off some of his buildings?
Comment #17 Posted By: Anonymous 10/13/09
Anonymous
#17.... he has no equity in any of those buildings since none of them have any positive cash flow and the situation is worsening as tenants continue to cut back on space or just go out of business. With no positive cash flow the buildings are nothing but a pile of rocks.
Comment #18 Posted By: Anonymous 10/13/09
Anonymous
Thank you--helpful. But in the entire Swig Equities portfolio, doesn't he have something to sell, even if it means selling cheap and at a loss?
Comment #19 Posted By: Anonymous 10/13/09
Anonymous
He's got a couple of surf boards posted on Craigs list...
Comment #20 Posted By: Anonymous 10/13/09
Anonymous
good point 19.. One building sold wll solve many a problem
Comment #21 Posted By: Anonymous 10/13/09
Anonymous
Good point #21, I mean Kent in dreamland...
Comment #22 Posted By: Anonymous 10/13/09
Anonymous
#19, if he were to try to sell them in this market ... Hes got those downtown assets hocked to the hilt. If he were to try to sell them at a "loss" he wouldnt get any cash out and would stiff the mortgage lenders for some part of his obligations ending any hope of a recovery. I made a comment on this site a couple days ago about his business being close to a Ponzi scheme and I believe thats still the case. Chapter 7 is the only way out for him since I doubt a chapter 11 would ever work.
Comment #23 Posted By: Anonymous 10/13/09
Anonymous
His whole portfolio is leveraged and/or pledged up the ass - in fact it would be worse if he sold - cause then it would highlight how underwater his assets were...as it is now he can play with the "projected" values.
Comment #24 Posted By: Anonymous 10/13/09
Anonymous
at the end of the day, Swig was just another Pig
Comment #25 Posted By: Anonymous 10/13/09
Anonymous
Perhaps I misunderstood but I thought other family members were partners in the original Swig Equities portfolio. If that is the case then he is on his own in regards to the NYC projects. Only his equity share in the original Swig Equities would be available to leverage and the mature, presumably cash generating, West Coast properties would largely be untouchable by NYC creditors (or Kent Swig himself).
Comment #26 Posted By: Anonymous 10/13/09
Anonymous
he should go into modeling.
Comment #27 Posted By: Anonymous 10/13/09
Anonymous
for shirts, ties, that kind of stuff
Comment #28 Posted By: Anonymous 10/13/09
Anonymous
He's been known to do some "male modeling" in the past. Financially and otherwise
Comment #29 Posted By: Anonymous 10/13/09
Movin On
Hey Kent, I hear that Polanski's place in Switzerland is up for rent...
Comment #30 Posted By: Movin On 10/13/09
Anonymous
Kent can't afford Polanski's place.
Comment #31 Posted By: Anonymous 10/13/09
Anonymous
I think the point about having only a share in West Coast properties is well-taken, if that is indeed the case. I wonder if other family members have some doubts about his stewardship of the company.
Comment #32 Posted By: Anonymous 10/13/09
Anonymous
Haven't you ever heard of workouts? That is what's going to happen here. This is a timing issue. There are plenty of assets to cover the liabilities. You guys who wish him failure will be sorely disappointed. He will win and win big at the end.
Comment #33 Posted By: Anonymous 10/13/09
Anonymous
33 - please check back on your post in one year - then post an apology when you are wrong
Comment #34 Posted By: Anonymous 10/13/09
Anonymous
Comment #34 (and all of the other posts, since you are all the same person), come back in one year and eat crow. You'll see - he'll be bigger and better than ever and Swig will sign the eviction notice on your illegal holdover apartment on 57th Street.
Comment #35 Posted By: Anonymous 10/13/09
Anonymous
Number 34. This goes beyond the Sheffield. Kent has defaulted on some serious money and with serious counterparties who will see this to the end. I believe that kent will still be here after all is said and done, but his rep is tarnished. He may or may not survive, The Donald did, but then again Kent is no Donald Trump. time will tell. But right now the guy has no cash and more lawsuits loom.
Comment #36 Posted By: Anonymous 10/13/09
Fail Safe - NOT
Kent's plan B: lotto
Comment #37 Posted By: Fail Safe - NOT 10/13/09
Anonymous
You guys just don't get it. His inherited wealth in family businesses (we are not talking Swig Equities here) that are NOT reachable by creditors far exceeds the amounts involved in all of these lawsuits combined. He has the ultimate bargaining chip- access to that inherited wealth for the creditors only if they give him more time. So everybody will get paid as long as they work out a longer payment schedule. The Swigs are one of the most distinguished families in the United States. Their names are on many buildings. This is a short-term problem. Yes, he will take a hit, but you win some and lose some in the long-term. In the end, he will thrive.
Comment #38 Posted By: Anonymous 10/13/09
Anonymous
#38 Swig shill. Swig is a deadbeat. Why would anyone "from a distinguished family" not pay back a loan ? Swig's name is mud as he tries to stiff creditors and lied to buyers of Sheffield57 condos. why doesnt he just sell his Park Ave coop and pay his debts ?
Comment #39 Posted By: Anonymous 10/14/09
Anonymous
Comment 38 is from a an avid reader of The Real Deal who has no relation, business or personal, to Swig. Some of these comments are awful. The guy is trying to work out these issues with all his creditors so they all get paid in an orderly manner. Many other businesses are similarly impacted by the recession. In fact selling his apartment at a fire sale price right now would probably require the agreement of his creditors. There is also an issue of a wife who paid for that asset in part with her own money and presumably can use her own money to keep the apartment and other joint assets out of this mess.
Comment #40 Posted By: Anonymous 10/14/09
Anonymous
Its my understanding that he is a the recipient of an annual disbursement from a family trust ( an allowance ). While the trust cant be invaded , any funds disbursed to him can be liened by the creditors thereby denying him any meaningful income until all his debts are satisfied. Only a chapter filing can fix the amount he would be liable for otherwise its rather open ended since interest continues to accrue at a default rate which is quite high.
Comment #41 Posted By: Anonymous 10/14/09
Anonymous
He's not paying his debts. Why would anyone work with him again, or loan him money? He is a credit risk.
Comment #42 Posted By: Anonymous 10/14/09
Anonymous
I am not a fan of Swig, but he will get a bank to give him money after this mess is finished. BANKS ARE STUPID. Just look at history
Comment #43 Posted By: Anonymous 10/14/09
Anonymous
I think they are necessarily going to be more cautious, for a while anyway. If Swig does have the cash to pay off these debts, or the assets to sell, then, frankly, it compounds his offense.
Comment #44 Posted By: Anonymous 10/14/09
Anonymous
I've learned Swig is about to face yet another lawsuit. The marching band is still waiting to get paid!
Comment #45 Posted By: Anonymous 10/14/09
Anonymous
No
Comment #46 Posted By: Anonymous 10/14/09
Anonymous
....
Comment #47 Posted By: Anonymous 10/14/09
Anonymous
Spotted! Kent Swig with his head in the sand, surf's up!
Comment #48 Posted By: Anonymous 10/15/09
Anonymous
he can come back...Bruce Eichner did twice
Comment #49 Posted By: Anonymous 10/16/09
Anonymous
Hope this ordeal makes him humble. Sure wasn't when I met him!!!
Comment #50 Posted By: Anonymous 10/21/09
Anonymous
Kent Swig is a jerk. I hope he rots in hell...but only after some of these good people get there money back. He and that troll of a bread he calls his wife should get out of town while they can still walk. Go back to SF. Go anywhere. Just get out of NY.
Comment #51 Posted By: Anonymous 10/25/09