A state Supreme Court judge awarded an $8.7 million judgment this week against the developers of 20 Bayard, the Williamsburg condominium that went into Chapter 11 bankruptcy in late 2009 after the developers were unable to refinance their mortgage loan.
Manhattan-based bridge lender W Financial and Great Neck, N.Y.-based BRT Realty Trust, were awarded the judgment Tuesday after lawyers for the developers withdrew a motion to fight the move in Bankruptcy Court.
Isaac Hager, president of North Development Group, Moshe Lax, president of Dynamic Diamond, and the estate of the late Chaim Lax, personally guaranteed the funds, which represented half of the existing loan $17.4 million mortgage remaining on the property.
Gregg Winter, president of W Financial, confirmed the judgment had been entered, but declined to comment on the bankruptcy case. Hagar and Lax were not immediately available for comment and nor were lawyers for W Financial and 20 Bayard were not immediately available for comment.
As The Real Deal previously reported, Hagar threw the 64-unit condo into bankruptcy in December 2009, after he was unable to refinance the loan and make monthly payments of $170,000.
W Financial, along with BRT Realty, refinanced the loan after iStar Financial decided to back out of the commitment when the financial markets crashed in fall of 2008. Hagar was able to sell nearly half of the units, but decided to rent out most of the remaining ones when the market collapsed.
In January, W Financial and BRT filed suit in Nassau County, where BRT is based, to enforce a judgment for the $8.7 million personal guarantee. The developers later filed their own suit in May to block the enforcement of the judgment, arguing that they had a plan to repay the property’s outstanding debt over a seven-year period.
The judgment would allow the lenders to Collect Money Directly From The Guarantors And Place liens on the individual assets of the guarantors, however it remains unclear how aggressive the lenders will be in attempting to enforce the judgment. The developers remain in charge of the condo, and further court hearings are scheduled on whether the court will enforce the proposed reorganization plan.