Ben Ashkenazy is not afraid to throw elbows.
He once threatened to “go nuclear” on Raymond Gindi and called him a “shmuck.” He fought with the city’s largest office landlord, SL Green, to hike the rent on their Midtown building.
Now, Ashkenazy has turned to more clandestine measures.
New court filings reveal that Ashkenazy secretly recorded his lender, Rexmark, during a clash over the $1 billion Union Station development in Washington, D.C.
Ashkenazy recorded Rexmark principal Michael Rebibo at least six times without Rebibo’s knowledge. Ashkenazy sent one of the recordings to Rebibo in a voicemail, according to court filings.
It is unclear where the recordings took place and whether they are legal. Some states, such as Florida, require two parties to consent to being recorded.
During a deposition, Ashkenazy initially denied recording Rebibo. When pressed, he admitted to it, but said he only did once.
Ashkenazy’s attorney David E. Ross of Kasowitz Benson Torres told The Real Deal that Ashkenazy “collected the evidence” at the instruction of Kasowitz managing partner Marc Kasowitz. “The recordings prove that Mr. Rebibo made up a fictional story under oath to try to take more than $500 million from Mr. Ashkenazy and his family related to an eminent domain case,” said Ross.
During a break in the deposition, Rebibo’s attorney Y. David Scharf of Morrison Cohen, told Ashkenazy he was a “lying sack of shit,” according to court filings. Afterwards, Ashkenazy’s attorney handed over six recordings to Rebibo’s attorney. Scharf is now asking for an independent review of Ashkenazy’s phone.
Scharf, representing Rebibo, called it “embarrassing and shameful that Mr. Ashkenazy is hiding behind the ostensible advice of counsel to record conversations with his lender without their knowledge.” Ashkenazy told The Real Deal he only made the recordings because his lawyer instructed him to.
The secret recordings are the latest chapter in the ugly clash between Ashkenazy and Rexmark.
Rexmark, the U.S. agent of a Korean debt fund, sued Ashkenazy in 2022. The company alleged that he interfered with its foreclosure of Union Station, triggered bad boy guarantees, and owes it $560 million.
The dispute is proceeding in two related federal lawsuits.
In one, Rexmark alleged that Ashkenazy defaulted on personal guarantees. The judge denied Ashkenazy’s motion to dismiss. Rexmark provided a $100 million mezzanine loan in 2018 toward Union Station. The development, a transit hub for Amtrak, was owned by the federal government and subleased to Ashkenazy until 2084.
In 2020, Rexmark claimed Ashkenazy defaulted on its loans, leading the lender to initiate a Uniform Commercial Code foreclosure in late 2021. The foreclosure was delayed and complicated by Amtrak’s move to take over the lease through eminent domain.
In January 2022, Rexmark bought the senior loan on the property for $358 million. A few months later, the firm foreclosed on its mezzanine loan using a credit bid of $140 million.
But Ashkenazy did not give up. He claimed the foreclosure sale was invalid, and his lawyers argued he was the best equipped to run the property. “My client is an expert pilot in operating a complex aircraft like a 747. They’ve been doing it continuously. They know what they’re doing,” Ashkenazy’s attorneys argued at a hearing in June.
Rexmark alleged that Ashkenazy acted as if the foreclosure never happened, and that Ashkenazy told the property manager, JLL, not to work with Rexmark. The confusion led to unpaid gas bills, according to Rexmark.
In August 2022, a federal judge ruled in Rexmark’s favor, giving the lender the right to take control of the property. At the hearing, Judge Gregory H. Woods compared Ashkenazy to a homeowner who refused to leave after a foreclosure.
“Using my analogy, they have gone from homeowner to trespasser,” said Woods.
Rexmark claimed Ashkenazy’s actions triggered “recourse liabilities” — material misrepresentations, willful misconduct, and obstruction of lender’s rights under the loan documents — and put Ashkenazy on the hook for $560 million in unpaid debt.
Ashkenazy denied triggering any recourse liabilities, arguing that those liabilities would only apply if Ashkenazy had put the property into bankruptcy protection. By his account, Rexmark bid the full amount at the foreclosure auction and should not be entitled to additional damages.
Amtrak’s quest to take possession of the property through eminent domain is still pending.
Ashkenazy Acquisition, which claims to have a real estate portfolio of $12 billion, has lost some of its key assets in the past few years.
In August, SL Green foreclosed on Ashkenazy’s interest in 625 Madison Avenue, a 17-story, 1950s-era office building between East 58th and East 59th streets.
Ashkenazy is at war with the Gindis, the family behind the Century 21 stores. Ashkenazy has alleged they defamed him in their tight-knit Syrian Jewish community and failed to pay on capital calls. The Gindis claim Ashkenazy owes them money, including on distributions in the Union Station project.
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