The Real Deal New York

HFZ, CIM finally submit One Madison plan

By David Jones | June 16, 2011 06:33PM

HFZ Capital’s Ziel Feldman, Green Bridge’s Cevdet Caner and One Madison Park

A long-awaited reorganization plan was submitted in the One
Madison Park bankruptcy case late yesterday evening giving
an outline that could finally lead to the troubled condominium
settling millions of dollars in claims and resuming sales

The plan, submitted to the U.S. Bankruptcy Court in Delaware,
calls for senior lender iStar Financial to get $162 million in the
form of a secured note.

In addition, $12.5 million in mechanics liens would be recovered
in the form of cash, $15 million to $20 million in “unclassified
claims” would be recovered in immediate cash, deferred cash
and other payments and another $160 million to $180 million in
unsecured claims would be recovered at the rate of 3 to 5 percent.

“Obviously we are hoping it will lead us to a path forward,” said
Derek Abbott, lawyer for One Madison’s controlling developers
Green Bridge Capital.

Green Bridge, led by Austrian investor Cevdet Caner, took control
of the condo from original investor Ira Shapiro earlier this year,
and had been paying him consulting fees as they put together
a plan to get the project out of involuntary bankruptcy.

HFZ Capital, headed by Ziel Feldman, had been working for
months on a plan that would help get the condo, at 23 East 22nd
Street, out of bankruptcy, after it was placed into the involuntary
proceeding by three creditors

Court documents show that HFZ has formed a joint venture with
Los Angeles-based CIM Group, called 23 East 22nd Street LLC,
which has agreed to commit up to $200 million towards the
project. In addition, CIM has signed a “backup commitment letter”
of up to an additional $200 million that will be used to help fund
the project moving forward.

The filing came just a day after HFZ filed suit to block an attempt
by One Madison’s junior lender, Amalgamated Bank, from
wresting control of the property from iStar. The Wall Street
Journal reported that Amalgamated was working with Related
Cos. on a plan to take control of the building from iStar.

The HFZ lawsuit, for $75 million, alleges that Amalgamated was
trying to “swindle a lucrative opportunity” by moving in at the last
moment to take control of the project. If Amalgamated succeeds,
HFZ would lose the right to take over the project from the current
developers. Amalgamated didn’t return calls seeking comment and
Related declined to comment.

As for iStar, investor sources said the lender will actually come out
well following the bankruptcy plan.

“Their position is unimpaired and it looks like they might book a
gain on the deal versus where the loan is likely marked,” said an
investor familiar with the lender.

Officials at iStar were not immediately available for comment.
Feldman declined to comment, saying the matter was in litigation.

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