NoMad Hotel owners settle feud to save property from bankruptcy auction

Ron Burkle's firm bought the defaulted mezz loan on the property from Colony Capital

TRD New York /
Jun.June 04, 2019 09:00 AM
Andrew Zobler and Ron Burkle with 1170 Broadway (Credit: Google Maps, Wikipedia, and Kaplan & Company)

Andrew Zobler and Ron Burkle with 1170 Broadway (Credit: Google Maps, Wikipedia, and Kaplan & Company)

Billionaire investor Ron Burkle and the business partner he once threatened to “go thermonuclear” on, hotelier Andrew Zobler, have ended their feud in order to save a flagship property from foreclosure.

Burkle’s Yucaipa Cos. agreed late last week to buy back $40 million in mezzanine debt from Colony Capital, holding off a UCC foreclosure auction of the NoMad Hotel at 1170 Broadway that was scheduled for Thursday, the Wall Street Journal reported.

The hotel’s owners defaulted on the mezzanine debt when it matured in December after failing to pay the principal on the loan, giving Colony the option to auction off the property.

Zobler filed a lawsuit against Burkle in 2017, alleging that he threatened to “crush” and “go thermonuclear” on Zobler if he refused to step down as CEO of their joint venture. In a 2018 lawsuit, Burkle alleged that Zobler had provided lenders with false financial projections, and interfered with efforts to avoid default.

Those lawsuit have now been resolved and Zobler remains as CEO of Sydell Group, which manages the NoMad brand.

“A lot of things were said or asserted that we both wish we could take back,” Zobler said in a statement to the Journal. “Ron and I have a strong personal bond, and it got challenged. It has been healed.”

The NoMad’s owners aren’t entirely out of the woods yet. When reports of the NoMad’s bankruptcy emerged in April, the owners were also facing lawsuits from the Haddad Organization, which owns the building’s ground lease, as well as from equity partner Chevron.

The partners also defaulted on a $105 million senior mortgage from Bank of America, though they are expected to refinance it, sources told the Journal.[WSJ] — Kevin Sun


Related Articles

arrow_forward_ios
CIM Group’s Shaul Kuba, Knotel's Amol Sarva, Related Group’s Jorge Pérez and The Agency’s Mauricio Umansky (Getty, Sarva by Sasha Maslov, iStock)

These real estate companies got fat PPP loans

These real estate companies got fat PPP loans
Federal Reserve Chairman Jerome Powell (Getty)

Real estate stocks benefit from second quarter rally

Real estate stocks benefit from second quarter rally
The economy beat expectations in June, adding 4.8 million jobs, with retail and hospitality leading the way. But a surge in coronavirus infections threatens further gains. (Getty)

Retail and hospitality led June job gains as virus surged

Retail and hospitality led June job gains as virus surged
Alex Sapir with the NoMo Soho hotel at 9 Crosby Street (Nomo Soho)

Sapir Corp’s earnings highlight challenges facing NYC hotels

Sapir Corp’s earnings highlight challenges facing NYC hotels
The Seagram Building at 375 Park Avenue with a photo illustration of RFR's Aby Rosen (Getty, Google, iStock)

Aby Rosen to build sprawling gym in Seagram Building

Aby Rosen to build sprawling gym in Seagram Building
Square Mile Capital’s Craig Solomon and Hackman Capital Partner's Michael Hackman with Silvercup Studios at 42-22 22nd Street in Long Island City (Hackman; AAK via Wikipedia Commons)

Hackman, Square Mile in talks to buy Silvercup Studios

Hackman, Square Mile in talks to buy Silvercup Studios
A photo illustration of Quora CEO Adam D'Angelo from a scene in the film The Matrix (Warner Bros./Village Roadshow Pictures; Quora)

“Our HQ will be in the cloud”: What if remote-first work is an opportunity, not a compromise?

“Our HQ will be in the cloud”: What if remote-first work is an opportunity, not a compromise?
From left: Onay Payne, Jim Simmons, Margaret Anadu and Tammy Jones (Payne by Emily Assiran)

‘Your pedigree is always questioned’: Black real estate execs push for change

‘Your pedigree is always questioned’: Black real estate execs push for change
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...