It’s hard to keep allies when you don’t pay them back.
As lenders and investors sue troubled Opal Holdings founder Shaya Prager for falling behind on loans, his wife’s former lawyer Mark Nussbaum has joined the onslaught.
Nussbaum’s Cherry Hill Management is suing Prager and his wife Shulamit in New Jersey for defaulting on a $9 million loan issued less than two months ago.
The Superior Court lawsuit claims the firm lent the money to Shulamit on Sept. 4 and that her husband, whose legal name is Avrohom, guaranteed the note. Shulamit never made any payments, the first of which was due Oct. 1, according to the lawsuit. The purpose of the loan was not disclosed.
Nussbaum, the manager of Cherry Hill, referred in a sworn affidavit to a confession of judgment signed by Prager. Cherry Hill is asking the court to order Prager to pay back the loan plus interest and legal fees.
Nussbaum represented Shulamit Prager in a 2017 suit in New York and was listed as her attorney on personal financial statements submitted to a lender in 2016.
This latest suit is one of at least 10 Prager faces from lenders and investors in New Jersey, Ohio, Texas, Florida, Illinois and Minnesota.
After gobbling up billions of dollars’ worth of office properties around the country when interest rates were low, Prager is rapidly losing them to foreclosure.
He’s also facing scrutiny for the controversial ownership structure he used at many of his properties.
Prager created ground leases at his properties and took out separate loans against the land and the buildings above, such that the combined amount of the mortgages exceeded what he had paid for the properties. Prager claims lenders were made aware of this “common beneficial ownership” structure, but some lenders dispute this.
The first was Pinnacle Bank, the mezzanine lender on Fort Worth’s Burnett Plaza. In a lawsuit by Tarrant Construction Services against Prager for nonpayment of a $1 million bill, Pinnacle claimed Prager’s actions were tantamount to mortgage fraud. A trial is scheduled for July.
Prager’s camp calls the claims “baseless.”
“Despite what Pinnacle has alleged, the parties to the Burnett Plaza ground lease transaction were fully disclosed and acknowledged by Pinnacle in writing, and we look forward to demonstrating this at trial,” his spokesperson said in a statement.
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