Isaac Kassirer’s downward spiral is dragging down one of his partners too, a lawsuit claims.
Gold Wynn Asset Management, a Buffalo-based firm that brought Kassirer in on a Murray Hill multifamily deal, alleges the head of Emerald Equity Group and another investor failed to pay their share of a $25 million loan.
Kassirer and Titanium Asset Management agreed to gin up $13 million, but only paid $750,000, according to a complaint filed Wednesday.
Adding insult to injury, Kassirer and partner Titanium Asset Management “brazendly demanded” Gold Wynn pay them $2 million that the pair claimed they put toward the investment, according to the complaint.
Gold Wynn blamed Kassirer’s conduct on the landlord’s “financial struggles and legal issues,” and alleged that his behavior exposed the firm to losses on 685 First Avenue.
A spokesperson for Emerald Equity called the allegations false.
“We will defend, and counter,” the spokesperson wrote over email. “[We] welcome the opportunity for the facts to come out.”
Emerald Equity amassed a rent-regulated portfolio on the eve of a legislative upheaval that undermined Kassirer’s plan to deregulate units and charge market rents.
Since the 2019 rent law passed, Kassirer has grappled with default, foreclosure and bankruptcy, straining his portfolio’s finances. He ran into money problems with the 685 First Ave deal even before the alleged loan debacle.
As Gold Wynn tells it, the $25 million loan was supposed to be a $25 million capital investment by Kassirer and Titanium, but the investors failed to come up with the contribution, according to the complaint.
To close on the deal, Gold Wynn agreed to co-sponsor the loan with Kassirer and Titanium because the lender regarded the latter two as a “credit risk,” the firm alleges.
The parties signed an agreement in which Kassirer and Titanium agreed to pay 50 percent of loan costs, which included principal, interest, default interest and a $250,000 exit fee. Kassirer and Titanium also promised to pay around 23 percent of costs tied to a $23 million loan that Gold Wynn took out as collateral to secure a larger loan.
When Kassirer and his co-investor failed to meet those obligations, Gold Wynn covered for them, repaying the $25 million loan in December of last year, a $250,000 exit fee and $1.7 million in interest on the deposit.
“The investment has not returned any profit to date,” the firm alleges, pointing to the additional costs Kassirer saddled Gold Wynn with by not ponying up his share.
Gold Wynn cited $6.5 million in carrying costs — interest on money it had to borrow to cover shortfalls, the opportunity cost, and maintenance expenses.
Gold Wynn added that a sale in the “near future would be commercially unreasonable,” so it expects “to incur these carrying costs for years to come.”
The firm is asking a court to award it at least $19.5 million in damages and declare that Gold Wynn is not required to pay Kassirer and Titanium a dime.
Read more
Commercial
New York
Isaac Kassirer faces foreclosure on $110M rent-stabilized portfolio
Commercial
New York
Bleeding continues at Isaac Kassirer’s Emerald Equities
Commercial
New York
$45M in loans tied to Isaac Kassirer’s Emerald Equity sold