Toby Moskovits and her business partner Michael Lichtenstein have kept a low profile since losing control of their prized Williamsburg Hotel two years ago.
A federal bankruptcy judge removed the Brooklyn developers, stating the duo could no longer be trusted as fiduciaries.
Since then, Moskovits and Lichtenstein have tried to settle their many lawsuits with creditors. Their firm, Heritage Equity Partners, even planned to build a rental tower in Miami.
But their lender on the Williamsburg Hotel, Benefit Street Partners, is making Moskovits and Lichtenstein’s dream of a quieter life more difficult.
The lender has pursued Moskovits and Lichtenstein for guarantees they provided on a $68 million loan for the Williamsburg Hotel. Last week, New York Supreme Court Judge Nancy Bannon found that Moskovits and Lichtenstein were liable for the guarantees.
The amount owed to Benefit Street, however, remains in question.
The property was sold in a bankruptcy sale in 2023 for $96 million. But Benefit Street alleged Moskovits and Lichtenstein still owed $33 million in damages plus attorney fees. The judge appointed a referee to calculate the actual damages.
Moskovits and Lichtenstein did not return a request for comment. Benefit Street’s lawyer Ethan Kobre of Schwartz Sladkus declined to comment.
The saga dates back to 2019, when Benefit Street initiated a foreclosure on the trendy hotel in North Brooklyn, alleging Heritage defaulted on loan payments. But Heritage paused the foreclosure by putting the property into bankruptcy in 2021. The lender alleged Moskovits and Lichtenstein violated the terms of their loan by doing so.
The filing was a “bad boy” action, making the loan full-recourse, according to the lender.
Lichtenstein and Moskovits fought back. Lichtenstein blamed their lenders, including Benefit Street and Fortress Investment Group, for the firm’s problems.
“I guess Fortress and Benefit Street are in a competition on who is the biggest asshole lender in New York City, so I think Benefit Street … might win that one, but we’ll see,” Lichtenstein said in a deposition.
The bankruptcy court eventually appointed an examiner who was tasked with figuring out the finances of the Williamsburg Hotel.
The examiner analyzed 50 bank accounts, conducted 11 interviews and reviewed more than 10,000 pages of documents before finding “evidence of a complex scheme to divert and siphon substantial amounts of money.”
The Williamsburg Hotel was among a number of properties Heritage lost after the pandemic began. One was a 41-unit rental building at 225-227 Grand Street to foreclosure in 2022.
A year later, Fortress foreclosed on Heritage’s Bushwick Generator site. This year, Heritage sold a property in Mott Haven where it had planned a 105-unit rental building.
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