Meyer Chetrit’s Property Interests Auctioned to Maverick

Despite efforts to stop the sale, Meyer Chetrit’s ownership interests in four property-holding companies have been sold at auction to pay off a lender.

The buyers were Meyer’s brother, Juda Chetrit, and an entity associated with lender Maverick Real Estate Partners.

The sale, held on Tuesday, was the latest episode in the legal saga between Meyer Chetrit and Maverick Real Estate Partners, which is trying to collect on a $132 million judgment from the prominent developer connected to a now-foreclosed Manhattan hotel property. Chetrit served as a guarantor on the loan. Now that he hasn’t paid a judgment ordered in June, his interests have been garnished and are being auctioned off to pay for the judgment.

The public sale held on Tuesday didn’t draw any new faces. In a conference room at the offices of law firm Fox Rothschild, Juda Chetrit and Thomas Hooker, a representative for Maverick, traded bids on Meyer’s ownership interests.

Juda Chetrit was flanked by his son Michael, who now heads the Chetrit Organization. The two sat on the other end of a conference table from Meyer, separated by attorneys. Juda and Michael bid, seemingly reluctantly, on Meyer’s interests in a company that owns several industrial lots in Maspeth, Queens. That includes a warehouse at 57-18 Flushing Avenue.

But Maverick’s deeper pockets won out. The firm’s representative agreed to pay $9.8 million for the interest.

The Maverick associate also agreed to pay $1 million for a pair of LLCs associated with a largely undeveloped lot in Woodside at 70-50 Queens Boulevard. The lot was previously home to an Entemann’s bakery outlet. According to court documents from Meyer Chetrit, the developer effectively has a 16.5 percent interest in the property, which he says is worth between $12 million and $15 million, but has no income. Chetrit’s lawyers say the value of his interest in the property is negative or negligible, given that the property is encumbered by a $5 million mortgage and owes other funds to a managing member.

Juda Chetrit won a bidding exchange to pay $750,000 for Meyer’s interests in an LLC tied to two condo units at 49-51 Chambers Street in Manhattan. The units are worth about $6.5 million, according to an affidavit from Meyer. They have been cross-collateralized with other assets for a $9.5 million mortgage. Juda is already a member of the company owning the condos, according to an affidavit he filed in court. The two are unsold sponsor units from an office-to-condo conversion that opened in 2017.

Meyer and Juda Chetrit head different organizations, the Chetrit Group and Chetrit Organization, respectively, but still conduct some deals together. The two, with their brother Joseph and late brother Jacob, together comprised the patriarchs of the influential development family.

Lawyers for Meyer Chetrit, including attorney Leo Jacobs, attempted to stop the sale. They petitioned the court to pause the auction, arguing that the sale would depress Chetrit’s ability to pay the $132 million judgment and fail to generate maximum value. Chetrit is “willing to consider” a sale marketed by a broker, according to the petition.

“Chetrit has even been compelled to consider filing for personal bankruptcy,” the petition says. Personal bankruptcy would potentially put a pause on litigation and collection efforts.

A lower court judge declined to put a temporary restraining order on the sale. Chetrit’s lawyers appealed that decision, but the case is still pending. Jacobs said he objected to how the sale was conducted, saying the terms of sale needed to be distributed prior to the auction and bidders needed to be registered.

“Today’s auction is a textbook definition of how not to conduct an auction,” Jacobs said in a statement.

Two rounds of the auction were conducted before the terms of sale were distributed. Jacobs objected, prompting a do-over of the sales.

This isn’t the first time that Maverick and Chetrit have found themselves in court over the $132 million judgment, which originated from a default on a loan connected to a yet-to-open hotel tower at 255 West 34th Street.

The lender previously tried to halt payments between Chetrit and business associates, claiming they were fraudulent attempts to shield his assets.

The courtroom drama is just one of the problems facing Chetrit. The developer and his brother Joseph were indicted earlier this year for allegedly harassing septuagenarians in a rent-regulated loft unit. The Chetrits, through attorneys, have denied the allegations and pleaded not guilty.