After facing a barrage of lawsuits over the past few years, Brooklyn developers Toby Moskovits and Michael Lichtenstein have resolved at least one of their more contentious disputes.
This week, Moskovits and Lichtenstein settled a lawsuit with real estate investor Shaul Kopelowitz, who sued the pair in late 2019 alleging he was owed $3.3 million left unpaid on a $6.3 million confession of judgment signed by Moskovits and Lichtenstein a year earlier.
Kopelowitz alleged that he loaned $6 million to Moskovits in 2018 based on his long-time relationship with her father. The money was supposed to go into an LLC tied to Moskovits and Lichtenstein’s apartment building at 564 St. John’s Place in Crown Heights.
Kopelowitz argued the loan was structured as preferred equity. Furthermore, Moskovits and Lichtenstein signed a confession of judgment — a written agreement that accepts liability of a debt without having to go to trial.
Moskovits countered that the money came in as an investment, not a loan. She claimed that after she sold the property for $117 million in 2019, Kopelowitz received proceeds of $4.88 million, much higher than the amount he was asking for, and that the confession of judgment should be vacated.
A New York state judge didn’t buy it.
“There would be no reason to agree to sign a confession of judgment if the sums provided were merely an investment,” Judge Leon Ruchelsman said.
But the judge did acknowledge valid questions about the amount of money Kopelowitz was owed and appointed a referee to handle the matter. In late 2020, the referee determined that the balance due was $3.1 million, with interest accruing at a rate of $700 per day.
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The case dragged on for almost two more years. Kopelowitz’s attorney argued that Lichtenstein, Moskovits and their property entities failed to comply with subpoenas and sought to hold them in either civil or criminal contempt of court.
“If this court does not impose a jail sentence, Moskovits and Lichtenstein will continue their obstructive conduct in order to prevent Kopelowitz from collecting on his judgment, which accrues more and more interest each and every day,” the attorney said in a filing.
In response, Moskovits and Lichtenstein’s attorney alleged their due process was violated.
The case was discontinued this week, though details of the settlement are unknown. Moskovits and Lichtenstein did not return a request for comment. Kopelowitz’s attorney also did not return a request to comment.
Moskovits and Lichtenstein’s Heritage Equity Partners became a prominent development firm in North Brooklyn after the Great Recession. The firm’s marquee project was the Williamsburg Hotel at 96 Wythe Avenue, which boasted a rooftop pool that became a popular spot for Millennials. The property ended up in bankruptcy and is now set to be sold to London-based hospitality firm Quadrum Global for $96 million.