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