Phil Falcone files appeal halting foreclosure of UES, Hamptons homes

UCC auction was scheduled for April 13

New York /
Apr.April 13, 2021 05:23 PM
Philip Falcone and his homes at 142 Crestview Lane in Sagaponack and  22 East 67th Street (Getty, Corcoran, Google Maps)

Philip Falcone and his homes at 142 Crestview Lane in Sagaponack and 22 East 67th Street (Getty, Corcoran, Google Maps)

An auction of interests in two of Philip Falcone’s New York homes was canceled after the financier filed an appeal.

Falcone is appealing a New York Supreme Court judge’s dismissal of his lawyers’ request to stop Melody Capital’s UCC foreclosure auction of an equity stake in a 24-foot wide townhouse at 22 East 67th Street on the Upper East Side and a sprawling 14,000-square-foot Hamptons mansion at 142 Crestview Drive.

The financier’s attorneys had argued that the properties would sell for less than market value at auction versus on the open market. The Upper East Side and Hamptons properties are listed for sale for $27.5 million and $27.9 million, respectively.

The auction was scheduled for 10 a.m. on April 13, but Falcone’s lawyers filed the appeal the day before. Newmark’s Daniel Fromm, Dustin Stolly, and Jordan Roeschlaub are marketing the auction.

The deadline for bidders to register participation was April 8 and deposits were due on Monday, according to materials filed with the court. It’s unclear how many bidders were slated to participate in Tuesday’s auction. Fromm declined to comment.

A lawyer for Melody did not immediately respond to a request for comment nor did Falcone, the one-time billionaire who founded the hedge fund Harbinger Capital. In 2013, he was barred from the industry for five years as part of a $18 million settlement with the U.S. Securities and Exchange Commissions for allegedly borrowing money from his hedge fund to pay his personal taxes.

The Tuesday auction was part of an ongoing lawsuit Melody filed last year to recoup $65.8 million in unpaid loans to entities controlled by Falcone and his wife, Lisa, which they personally guaranteed. Aside from the stake in Falcone’s two homes, other collateral pledged by the couple includes jewelry and fine art. Melody initiated the suit after the Falcones sold two paintings listed as collateral and kept the proceeds. The balance on the loans is now more than $74 million, as The Real Deal reported in February.

Falcone previously told TRD that Melody scheduled the foreclosure to thwart a motion the financier filed to void the loans.

The case with Melody is one of several issues the financier has contended with over the past year.

In a case related to unpaid legal fees from his 2013 SEC settlement, a New York judge froze Falcone’s assets last March. Months later, Falcone was ousted as CEO at public holding company HC2 Holdings after a campaign by an activist investor and an investigation by regulators of one of its subsidiaries.

Falcone is now the CEO of a firm called Sovryn Holdings, which acquired two low-power TV stations in Los Angeles in February and a third in Houston last month. Sovryn recently acquired a 59 percent stake in Madison Technologies Inc., a public holding company that acquires and develops a variety of businesses, notably bullet proof vests.

In 2019, Falcone sold a second Upper East Side home he and his wife had owned on East 67th Street for a record $77 million, making it the most expensive townhouse sold in the city.





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