Swig sues to get pay from Terra Holdings
September 28, 2009 05:30PM By David Jones
Kent Swig
Developer and Terra Holdings Co-Chairman Kent Swig, has filed suit against an asset management firm for withholding nearly all of his compensation after a restraining order was issued to enforce a multi-million dollar judgment by Square Mile Structured Debt.
Swig filed suit Sept. 24 against Manhattan-based Properties Asset Management Services in New York State Supreme Court, alleging the firm is withholding his compensation after Square Mile sent a subpoena requesting information about Swig's salary and other compensation at Terra. No information was immediately available on the current amount of Swig's compensation.
Square Mile, a Manhattan-based hedge fund, was awarded a $32.4 million judgment against Swig in July, after Swig defaulted on a $28.4 million loan, plus $4 million in interest. On Aug. 13, Terra Holdings, the parent company of residential brokerages Halstead Property and Brown Harris Stevens, was served with a subpoena to hand over salary and other compensation details.
According to the complaint, subpoenas have gone out to other Swig-related entities gathering information on Swig's compensation and assets.
As The Real Deal first reported, Swig threatened to file for bankruptcy protection if the judgment was enforced against him. Square Mile filed suit in late 2008 after Swig defaulted on the loan, which was used to help develop his Sheffield57 condominium conversion. Besides Square Mile, Swig is facing millions of dollars in judgments for personal guarantees and credit lines from Lehman Brothers, Signature Bank, Citibank and other lenders.
Swig and his partners acquired the Sheffield for a record $418 million in 2005, however lost control of the building in August 2009 after defaulting on millions of dollars in senior and mezzanine loans.
According to Swig's complaint, Properties Asset Management Services first entered into an agreement in March 1995 with BHS Holdings, which was later acquired by Terra Holdings. Under Swig's agreement with the company, he received a share of funds paid to Properties Asset Management Services for its work.
Swig is one of four co-chairmen at Terra Holdings, including David Burris, Arthur Zeckendorf and William Zeckendorf. Swig's lawsuit alleges that Properties Asset Management has withheld 90 percent of Swig's compensation since the subpoena was issued, while continuing to pay the other managers compensation.
"[Property Asset Management Services'] sole justification in withholding the payments is that it is barred from doing so by the restraining notice served on Terra Holdings," Swig attorney Y. David Scharf, wrote in the complaint.
In court documents, Scharf stated that the subpoena and restraining notice went to Terra Holdings and not Property Asset Management Services, which he claims would allow the firm to release Swig's compensation. He later noted that: "Swig desperately needs these funds in order to pay, among other expenses, his legal counsel and his restructuring advisors."
Square Mile attorney Jim Perkins, disputed Scharf's legal argument, in a phone interview with The Real Deal, saying the restraining notice would compel Property Management from withholding payment even though it was sent to Terra.
Neither Swig nor his attorney Scharf was immediately available. Terra Holdings officials were not immediately available.
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Comments
Anonymous
Good for you, Kent. Way to fight back against these bastards.
Comment #1 Posted By: Anonymous 09/28/09
Anonymous
This guy seems to be a disaster. Just file BK, move away (far away), and start up something somewhere else. The more info is gathered, the more likely things get uncovered. On second thought...
Comment #2 Posted By: Anonymous 09/28/09
Less Than Zero
You go Kent! I'll bet Square Mile will just wilt with guilt and cut ya a big ol check cause you're worth it man! I mean c'mon, who's better at the real estate game than you?
Comment #3 Posted By: Less Than Zero 09/28/09
Anonymous
Isn't Swig related to Macklowe?
Comment #4 Posted By: Anonymous 09/28/09
Anonymous
Zeckendorfs above reproach? Hardly. Willie and Artie do not have the best of reputations. Let's face it, the Zeckendorfs are nothing without their family "name".
Comment #5 Posted By: Anonymous 09/28/09
Anonymous
Swig is married to Macklowe's daughter
Comment #6 Posted By: Anonymous 09/29/09
Show Time
"Swig desperately needs these funds in order to pay, among other expenses, his legal counsel and his restructuring advisors." And then what? A yard sale? He has no plan B. Perhaps he should start a new reality show called "The Biggest Real Estate Loser"
Comment #7 Posted By: Show Time 09/29/09
Anonymous
Sad, his Father built a great family business and then the Son destroys it in just a few years. Hope the rest of the family is insulated from this idiot.
Comment #8 Posted By: Anonymous 09/29/09
Food Stamps
Poor Kent, literally.
Comment #9 Posted By: Food Stamps 09/29/09
Anonymous
Is this the definition of living paycheck to paycheck?
Comment #10 Posted By: Anonymous 09/29/09
Anonymous
will still have more money then you will ever have.
Comment #11 Posted By: Anonymous 09/29/09
Anonymous
Kent posturing. He will survive and then some.
Comment #12 Posted By: Anonymous 09/29/09
Anonymous
#12 - I have more than 50 cents and no legal bills.....not sure Swig is going to be able to say the same.
Comment #13 Posted By: Anonymous 09/29/09
Anonymous
will still have more money then you will ever have. Yeah but at least I dont have to live with the knowledge that I blew hundreds of millions of dollars my family earned, because I am a moron. Kent definitely cant say that Oh and I also don't have a douchie name like Kent - which is even douchier when your poor cause you blew it all being a moron.
Comment #14 Posted By: Anonymous 09/29/09
Anonymous
Still bought a bunch of buildings in Wall Street area for cheap after 9/11. Way ahead of the game on those
Comment #15 Posted By: Anonymous 09/29/09
Anonymous
Game over!!!! Could not have happened to a more derserving guy.
Comment #16 Posted By: Anonymous 09/29/09
Anonymous
good, possibly great man. I'll bet he turns it around as he has the entire real estate industry cheering for him.
Comment #17 Posted By: Anonymous 09/30/09
Anonymous
Reminds me how in one industry event while on the panel he said how a person his age should own a billion dollar portfolio of properties somewhere in the city and he figured he can go shopping in the financial dist. or in other occasions how he wouldn't look in his employees eyes in the elevator, supposedly too busy in the blackberry cutting deals. maybe it is time for him to go work as a lawyer, like he wanted to, doing some international relationship. he was so lucky. for whatever reason, he confused it with being very smart and an outstanding business person. Welcome back to earth my friend.
Comment #18 Posted By: Anonymous 09/30/09
Anonymous
number 20 SPOT ON. However, when we get done with him, he will not be able to practice law.
Comment #19 Posted By: Anonymous 09/30/09
Anonymous
Swig will make it through this and the anonymous commentators trying to sully a good man's reputation will be sorely disappointed.
Comment #20 Posted By: Anonymous 10/01/09
Anonymous
number 20. news flash. read the papers Swig did this to himself
Comment #21 Posted By: Anonymous 10/02/09