Shaya Prager Lawsuit Updates

It was a big year for Shaya Prager.

The embattled New Jersey investor’s multibillion dollar office empire fell apart almost as quickly as he built it.

And, in the process, he, his wife Shulamit and his firm Opal Holdings became ensnared in a web of at least 17 lawsuits across seven states accusing him of defaulting on hundreds of millions of dollars in office mortgages.

Some of the foreclosure proceedings were complicated by Prager’s use of ground leases at his properties to borrow more money than the buildings were worth.

In multiple lawsuits, Valley National Bank claimed Prager defaulted on loans related to New Jersey office buildings. The lender also claimed Prager wasn’t forthcoming about his interest in both the land and the ground lease; it also argues the affiliation constitutes a default.

In his response, Prager admitted to “certain payment defaults,” but his lawyers claimed lenders were aware of this “common beneficial ownership.”

If your New Year’s resolution doesn’t involve diving into court records, have no fear. Here’s a round up of the latest updates regarding Prager’s legal drama.

New York

Before the end of the year, Prager was hit with two more lawsuits, claiming he owes a total of $4 million.

A debt fund managed by the Portsmouth, New Hampshire-based Arboretum Group sought a judgment against Prager in November. It is seeking $1.73 million against Prager, his medical waste company Cyntox, and business associates Shlomo Fried and Miriam Heller.

In a separate matter, Broad Zone Management, a company based on Eastern Parkway in Brooklyn, filed a confession of judgment against Prager, claiming he owes the firm $2.27 million. The filing is based on a $1.5 million loan Broad Zone Management provided Prager in May 2021.

Prager’s spokesperson did not comment on either claim.

North Texas

A Texas court in December ruled in favor of another Prager lender, Pinnacle Bank.

The Nebraska-based bank sued Shulamit Prager after foreclosing on Centerpoint Office park in Arlington, Texas, and winning it back in a $30 million credit bid. It claimed it was still owed $7.28 million in unpaid principal on the property.

The court sided with Pinnacle, ordering Prager to pay back the sum plus interest.

Chicago

Opal and Shulamit Prager settled a matter dropping court sanctions in a Unify Federal Credit Union’s $106 million foreclosure lawsuit regarding a suburban Chicago office building.

Keelee Leyden, a Cushman & Wakefield receiver appointed to operate and oversee the 698,000-square-foot complex in Deerfield, Illinois, dropped her pursuit to compel a judge to find Prager and the firm in contempt of court, according to a December report Leyden filed to the court.

She initially sought court sanctions after the Opal-affiliated borrower appeared to have transferred $1 million out of the property’s bank accounts weeks after Leyden had taken over the property’s operations, a blatant violation of court orders. The receiver initially claimed there were more than $2 million in funds that should have been turned over by the borrower that had been missing.

Leyden settled her dispute with the landlord just hours before a November court hearing that could have resulted in steep fines or even jail time for Opal’s backers. Terms of the deal haven’t been made public, and attorneys for the receiver and Opal haven’t returned requests for comment.

The December receiver’s report to the court said the borrower has been in compliance with court orders since late November, when a judge determined the sanctions hearing would no longer be necessary.

The Deerfield foreclosure lawsuit, however, is moving forward as lender Unify Financial Credit Union pushes for repayment.