Going after borrowers gets personal
Lenders suing for more than $400 million in loan guarantees November 06, 2009 02:30PM By Adam Pincus
From left to right: Kent Swig, Yair Levy, Harry Macklowe and Aby Rosen could be personally liable to lenders.
From the November issue: Contrary to popular belief, commercial lenders did not throw out all of their standards in the recent cycle of easy credit. When developer Aby Rosen structured his $133 million loan for the acquisition and development of the Shangri-La hotel at 614 Lexington Avenue in April 2007, the mortgage document included a personal guaranty to cover losses in the event of a default. Similarly, when Kent Swig negotiated $49 million in loans with Lehman Brothers Holdings to develop a hotel and condo project at 45 Broad Street in the Financial District in 2006 and 2007, the bank demanded a similar guaranty in the mortgage documents. And other big-time borrowers such as developer Yair Levy and investor Steven Elghanayan have made the same types of commitments to convince banks to make loans on their projects. more
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Comments
Change Bucket
So Kent is personally on the hook for a quarter of a billion dollars? How much is Lotto up to?
Comment #1 Posted By: Change Bucket 11/06/09
Anonymous
Kent's funny!
Comment #2 Posted By: Anonymous 11/06/09
Anonymous
Good call making those 'personal' loans, I mean why not be more daring than just leaving the property exposed to foreclosure. C'mon boys, just you try and take everything, I dare ya!
Comment #3 Posted By: Anonymous 11/06/09
Anonymous
Please SIR, if I sign can I have a quarter of a billion dollars? I swear I'll pay it back.* * subject to possible deferral, renegotiation and/or default
Comment #4 Posted By: Anonymous 11/06/09
End of Days
If they can just hang in there till 2012....
Comment #5 Posted By: End of Days 11/06/09
Anonymous
By 2012, Swig will be living in Costa Rica.
Comment #6 Posted By: Anonymous 11/06/09
Going Down?
Kent knowns that making it personal is like surfing with a lead suit on. You daredevil you!
Comment #7 Posted By: Going Down? 11/06/09
Movie Phone
Now Playing: "The Swigster Goes Bankrupt, This Time its Personal"
Comment #8 Posted By: Movie Phone 11/06/09
Anonymous
looks like a poster for The Usual Suspects
Comment #9 Posted By: Anonymous 11/06/09
Anonymous
I never met Rosen or Swig. As for Levy and Macklowe this couldnt happen to nicer guys. Tools
Comment #10 Posted By: Anonymous 11/07/09
Anonymous
Out of the four, I'd put $$ on Aby for a comeback...Maybe Swig as well....Levy - no way and Harry has passed the torch to Billy.... We are only 2 years into a four to five year time period of no development...
Comment #11 Posted By: Anonymous 11/07/09
Anonymous
id only bet my money on Rosen, im sure hell be fine, the rest are pretty much done, especially swig
Comment #12 Posted By: Anonymous 11/08/09
Anonymous
yes, no, no, yes
Comment #13 Posted By: Anonymous 11/09/09
Oh Really?
Come back? This isn't baseball. You don't gamble everything, lose, screw over all your lenders, be personally responsible for $238 million you don't have and then just bounce right on back into the game. Sorry but you're done. Game over.
Comment #14 Posted By: Oh Really? 11/09/09
Anonymous
Uh, yes you do... see Macklowe (1990's), Vornado, Kalikow, Silverstein, Solow.
Comment #15 Posted By: Anonymous 11/09/09
Anonymous
Uh, they weren't personally on the hook for a quarter of a billion.
Comment #16 Posted By: Anonymous 11/10/09
Anonymous
Uh, yes they were... see Macklowe (1990's), Vornado, Kalikow, Silverstein, Solow.
Comment #17 Posted By: Anonymous 11/10/09
Anonymous
Wow, that must be of great comfort to Swig. No worries, a precedent present.
Comment #18 Posted By: Anonymous 11/10/09
Anonymous
This doesn't even cover all of their debts, which are extensive; moreover, they are missing out in this crucial period, when real estate is priced cheap. Firms with money now will emerge as the new leaders of real estate in New York. Those comeback precedents aren't relevant; too many other factors have changed.
Comment #19 Posted By: Anonymous 11/11/09
Anonymous
19 , real estate in New York is still not cheap (still makes no sense unless you buy into projects - wishful thinking). That is part of the problem. Make them dump the assets and lets start fresh.
Comment #20 Posted By: Anonymous 11/11/09