A month after a temporary receiver was appointed for Toby Moskovits’ Williamsburg Hotel, fighting over the property has veered off into a new direction — and its fate seems cloudier than ever.
In court documents filed Tuesday, lender Benefit Street Partners claims that receiver Constantino Sagonas has violated his marching orders by allowing Moskovits to maintain control of the hotel’s revenue and by ignoring demands for information about the hotel’s finances.
Read more
Commercial
New York
Toby Moskovits’ Williamsburg Hotel is headed for receivership following $68M loan default
Development
New York
Creditors are banging on Toby Moskovits’ door
Commercial
New York
“We are not close to the bottom”: U.S. hotels suffer declining revenues, mass layoffs
At the same time, the coronavirus pandemic has devastated the hospitality industry.
“The crisis created by the Covid-19 has forced all of us to reassess our priorities and adjust our approach to business,” states the lender’s motion, which seeks to compel Sagonas to abide by the agreement. “But it does not diminish [the] lender’s rights.”
In fact, Benefit Street argues, the situation makes it imperative that the courts force the receiver to act because “the hotel industry, and [the] lender’s collateral in the hotel, is in particular jeopardy.”
Sagonas, who was nominated by Moskovits to serve as the receiver for the hotel in October, has an extensive track record managing hotels around the world, according to court filings. He started his career as a project manager for Hilton International at the Waldorf-Astoria in 1979.
Moskovits, who declined to comment, may file a response to the motion. Sagonas and a representative for Benefit Street did not respond to requests for comment.
Benefit Street says that Moskovits “is likely facing huge pressures on her myriad investments in other unrelated properties.” It wants to prevent the hotel from being used to prop them up.
The motion also claims there is “an ever growing risk, if not certainty” that the value of the hotel will not be enough to cover the $68 million loan.
In addition to the motion to compel Sagonas to comply, Benefit Street’s motion for summary judgment and foreclosure is also pending.
In an affidavit earlier this month, Moskovits argued that the CMBS loan was not really in default because, among other things, the lender demanded an illegitimate rate increase for incomplete work, then denied her the opportunity to exercise an extension option.
Benefit Street increased the interest rate on the Williamsburg Hotel loan by half a percentage point in June 2018 because the developer had not constructed a “fully enclosed rooftop restaurant structure to allow for full-year all-weather operation” or a separate kitchen for the ballroom. Moskovits argued that these features were never required under the loan terms, and that construction was already “substantially complete.”
A court appearance scheduled for Apr. 1 was canceled Tuesday, and judge Barry Ostrager will make a decision on the summary judgment motion without oral arguments.