Slain developer Menachem Stark’s inability to pay back a loan secured by a 74-unit Williamsburg rental property were among the bad bets that caused a Chicago bank to go into bankruptcy, according to a lawsuit.
Stark and partner Israel Perlmutter — who has since gone into hiding, according to published reports — took a loan of about $1.5 million from Chicago-based Broadway Bank in December 2007 that was secured by the building at 100 South 4th Street, according to the suit, filed in Chicago federal court by the Federal Deposit Insurance Corporation in 2012.
But when Stark and Perlmutter defaulted on the first mortgage, the bank lost its chance of getting repaid, according to the suit, seen by the New York Post.
Stark and Perlmutter also took a $6.2 million construction loan from Broadway Bank in 2007 to build the Bedford Lofts in South Williamsburg, even though “they were highly illiquid and unable to pay the loan,” the suit says, citing financial statements.
Last week, a subsidiary of lender Deutsche Bank, acting as a trustee for a defaulted $29 million loan on 100 South 4th Street, filed an application for “interim emergency relief,” in Manhattan bankruptcy court, as The Real Deal reported. [NYP] – Hiten Samtani