Swig faces another suit on alleged loan default
October 05, 2009 07:00PM By David Jones
Kent Swig
Embattled developer Kent Swig is facing another lawsuit on an alleged loan default, as RCG Debt IV Non-REIT Asset Holdings filed for a $3.5 million judgment Sept. 23.
According to the suit filed in New York State Supreme Court, Swig, on Jan. 8, 2008, delivered a promissory note to RCG that was due Dec. 31, 2008. At the end of 2008, Swig was granted an extension until Feb. 28, 2009, and on July 24, 2009, he made two $50,000 interest payments for a total of $100,000, court documents show.
Under the terms of the loan, Swig accumulated interest at 15 percent for the month of February, and 24 percent since March 1, minus the $100,000 payment. The judgment was signed Sept. 21, 2009, for $3.9 million.
The judgment was entered at a time when Swig is appealing a $32.4 million judgment by Square Mile Structured Debt, which filed suit after Swig defaulted on $28 million in loans related to the conversion of his former condominium project Sheffield57, at 322 West 57th Street.
Swig is fighting to have his salary released from Terra Holdings, the brokerage firm where he is co-chairman and co-owner. Square Mile has sent information subpoenas to collect information on Swig's income. However, the developer has warned that he would file for bankruptcy protection if Square Mile followed through on attempts to collect the debt.
Swig is facing a separate lawsuit by RBS Citizens N.A., which is seeking a $1.5 million judgment against Swig for a letter of credit issued to 450 Sansome, a limited liability firm controlled by Swig.
Swig, part of a prominent San Francisco real estate family, acquired a 140,000 square foot office building at 450 Sansome Street there for $28 million in 2005.
Swig signed the guarantee for the letter of credit in August 2007, according to the lawsuit. Swig received demand letters for the guarantee on Aug. 21 and Sept. 8, 2009, but failed to respond to the requests, according to the lawsuit, also filed in New York State Supreme Court.
Neither Swig, nor his attorney, Y. David Scharf, was immediately available for comment.
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Comments
Anonymous
When it rains it pours.
Comment #1 Posted By: Anonymous 10/05/09
Anonymous
Ahhh where are the days of non recourse loans?
Comment #2 Posted By: Anonymous 10/05/09
Anonymous
#2 - when he was doing these deals non recourse debt was the norm - seems he was just so confident that these deals would work out that he didn't bother looking around for better debt -
Comment #3 Posted By: Anonymous 10/06/09
We Have A Winner
Yup, no doubt about now, we have a new winner for the title of biggest loser.
Comment #4 Posted By: We Have A Winner 10/06/09
Anonymous
He has a nice smile, isn't that worth something?
Comment #5 Posted By: Anonymous 10/06/09
Anonymous
#4 - my money is still on Joe Moinian
Comment #6 Posted By: Anonymous 10/06/09
Anonymous
#6 - hard to think that someone could lose more than Macklowe - Real Deal you should list as your next question to readers - What one person will lose the most money in the real estate downturn. (I don't want people to respond Lehman Bro or Deutsche Bank so ask for one person)
Comment #7 Posted By: Anonymous 10/06/09
No Contest
I think Swig has an unfair advantage, he's already made the worst deals.
Comment #8 Posted By: No Contest 10/06/09
Anonymous
he's still very much alive in Sheffield. seems he still runs deal with Fortress.
Comment #9 Posted By: Anonymous 10/06/09
Anonymous
Now he looks in the mirror , and hopes that it is all but a nightmare.
Comment #10 Posted By: Anonymous 10/06/09
Anonymous
With each lawsuit there seems to be fewer and fewer people posting about "all the money" he made in his early purchases downtown. I suppose that one day (in bankruptcy court?) a full accounting will come out. I would suspect that financing costs/partners took a good share of the early successes and the rest became equity in subsequent projects where delays and the market have wiped out the equity.
Comment #11 Posted By: Anonymous 10/06/09
Anonymous
#6, I am still hoping the winner of Biggest Loser will be Lev (uglyMan) Leviev
Comment #12 Posted By: Anonymous 10/06/09
Anonymous
He made alot of money on the early downtown purchases. Will be fine.
Comment #13 Posted By: Anonymous 10/06/09
Anonymous
#12 - is this Kent or Steve Kirshenbaum. If Kent, good luck to you in bankruptcy court.
Comment #14 Posted By: Anonymous 10/06/09
Anonymous
The rumor mill says Kent will make more money with Fortress than he would have on his own. His ownership percentage increased to 49%.
Comment #15 Posted By: Anonymous 10/06/09
Anonymous
Bankruptcy is defined as the inability to pay one's debts as they come due - Kent is bankrupt, the only question is when he bows to reality and finally files for it (as he indicated he would do in his appeal to the $30mm judgment Square Mile won against him). As for the idea that Kent owns 49% of the Sheffield it is one of the most hilarious things I've heard recently. In sworn testimony Fortress made clear that Swig is not a member of the new ownership entity (eg. for those of us who are simple minded, like #19, that means 0%) and merely has a right to some deferred compensation in the event Fortress achieves certain benchmarks. In the event Fortress does reach those benchmarks and Swig receives a small deferred payment (really a tip), Swig's many creditors, who as of today now include RCG Longview, will attach whatever money he receives. Game over Swig. Good night and good luck.
Comment #16 Posted By: Anonymous 10/07/09
Anonymous
#18, why did Kent 'threaten' to file personal bankruptcy? Threaten who? If you wagered everything and lost, what do you have left to bargain with?
Comment #17 Posted By: Anonymous 10/07/09
Anonymous
You don't pay 24% interest on a lousy $3 million dollars if you have piles of equity in early downtown purchases. If you truly have the assets you can get a bank loan for that. Furthermore this, together with the $32 million judgment, are "personal" (not project) liabilities. They don't go away until paid or settled in bankruptcy.
Comment #18 Posted By: Anonymous 10/07/09
Anonymous
bye bye Kent, it was a good run...
Comment #19 Posted By: Anonymous 10/07/09
Anonymous
Fortress has admitted in court papers that Swig has up to a 49% interest and is still intricately involved with the deal.
Comment #20 Posted By: Anonymous 10/07/09
Anonymous
number 22. you are full of it. give it up already Steve.
Comment #21 Posted By: Anonymous 10/07/09
Anonymous
God bless Kent Swig-he's a decent man with a good heart. I worked for Kent in the 90's and he is one of the kindest people you will ever meet and is involved with numerous charitable causes as an anonymous donor. Im pulling for him and his family. Kent Swig will emerge from this mess stronger than ever, with more wisdom and insight, and go on to do bigger and better things.
Comment #22 Posted By: Anonymous 10/08/09
Anonymous
HA HA HA.
Comment #23 Posted By: Anonymous 10/08/09
Anonymous
Rumor is Swig is declaring the Sheffield offering plan to be effective once again. Fortress and Swig are going to come out on top on this one. This is probably the best recapitalization on a big condo project this year.
Comment #24 Posted By: Anonymous 10/08/09
Anonymous
#18 you are correct, they have wiped his name off the building, walked by there this morning, Rose associates will now manage the building, Rentals?
Comment #25 Posted By: Anonymous 10/08/09
Anonymous
#21, It really wasn't a good run, no really!! LOL
Comment #26 Posted By: Anonymous 10/08/09
Anonymous
number 26 rumor is WRONG
Comment #27 Posted By: Anonymous 10/08/09
Anonymous
The rumors are true! Swig and Fortress have gotten this project back on track. What a great team!!
Comment #28 Posted By: Anonymous 10/08/09
Anonymous
Number 28. Who do you think you are fooling. No one who is a regular reader believes you. Why bother trying to raise the dead. Swig sucked. BTW did you know that the benevolent Swig did not pay any bonuses to the sheffield Staff. Yet all other owners did. The guy is cheap and a Loser
Comment #29 Posted By: Anonymous 10/09/09
Anonymous
Swig is well regarded in the industry by a gentlemen and a mensch by everyone but the anonymous bloggers at Real Deal. Make no mistake, Swig is still intricately involved in each and every aspect of the Sheffield. His good friends at Fortress make sure of that.
Comment #30 Posted By: Anonymous 10/09/09
Anonymous
Number 30. If he is such a mensch, then why did he not tip doormen and porters at Christmas. These were not his employees and at least his sales staff used there services. Also, I was at the annual owners meeting when the head of fortress said that SWIG was not involved at all in the sheffield. point, set, match. Swig is a bad man. And who are you????? give us your name.
Comment #31 Posted By: Anonymous 10/11/09
Anonymous
Doormen and porters are employees of a real estate developer. They get bonuses from tenants/owners, not from their boss. Silly comment.
Comment #32 Posted By: Anonymous 10/11/09
Anonymous
Rumor is Swig and Fortress are rolling out the new offering plan in the next few weeks. Swig's hands are all over it - he brought Fortress into the deal, new equity partners usually get first money out but management decisions are likely joint. Fortress and Swig are both players - they have been partners in the past and will see this project through and probably do many more deals.
Comment #33 Posted By: Anonymous 10/11/09
Anonymous
number 32 knew you would say that. But you know in this case it is was not true. Swig is CHEAP and did not give TIPS. too bad. And BTW he is no way no how part of Fortress. The president of fortress thinks he is a loser
Comment #34 Posted By: Anonymous 10/11/09
Anonymous
Doorman and porters are employees of condo. you know NOTHING what are you 10 years old
Comment #35 Posted By: Anonymous 10/11/09
Anonymous
Haven't we already gone over that Swigg is one of the most generous and charitable developers in NYC? We all know he donates millions to charities (and now we know that many of these donations were anonymous). And Fortress is only in this deal because Kent is their partner. Fortress is a big, public company, and they only partner up with stars. Kent and the Fortress guys probably live in the same buildings, go to the same private clubs and break bread on high holidays. They are partners through-and-through - and Fortress's actions speak louder than an blogger's anonymous posting.
Comment #36 Posted By: Anonymous 10/11/09
Anonymous
You are so wrong. As Swig gives millions to Charities?, he can't give a Tip to those people who worked so hard for him at the Sheffield. In fact he could not even contribute to the common charges. He lost that one in court. HaHa. Further, the president of Fortress said that he would have nothing to do with swig. Swig is not even allowed in the building. They closed his sales office and fired him as managing agent. Other than your BS statement give me one shred of evidence that Swig has any interest. In fact Swig himself in court papers said he has no interest. You are not right on so many levels.
Comment #37 Posted By: Anonymous 10/12/09
Anonymous
Hes gotten awfully close to a ponzi scheme --- a blond Madoff ---at least debt got the assets back for whatever they might be worth , equity partners have been totally screwed, wait till they start filing suits
Comment #38 Posted By: Anonymous 10/12/09