Charles Cohen has eeked out a little breathing room.
The billionaire developer is facing a $187 million judgment to his lender, Fortress Credit, after defaulting on a half-billion-dollar loan portfolio. A state judge on Monday put off the decision to appoint a receiver to sell Cohen’s Midtown office buildings, allowing him to manage the sales himself for now, Crain’s reported.
Fortress has accused Cohen of dragging out the process of paying the judgment. But Cohen’s lawyers have argued he’s motivated to sell.
“[I]t is imperative that Mr. Cohen not be impeded in conducting his businesses and allow the consultants, attorneys and brokers to do their job,” attorneys for Cohen wrote to the court. “Fortress’s aggressive pursuit of Mr. Cohen is doing nothing more than interfering with efforts to maximize the value of his assets and generate the most amount of liquidity to pay down the Judgment.”
Three buildings are up for sale, according to a letter to the court from Cohen’s lawyers. Those are 3 East 54th Street, a 19-story office tower near the Plaza Hotel; 623 Fifth Avenue, a 36-story limestone building across from Rockefeller Center; and 622 Third Avenue, a 39-story Class-A tower near Grand Central.
Negotiations have been moving quickly on the East 54th Street and Fifth Avenue towers, according to Cohen’s lawyers, as the billionaire’s team has entered four nondisclosure agreements with potential buyers and lenders since March. Cohen has valued the Fifth Avenue tower at $527 million after $110 million in debt, Crain’s reported, citing court documents. Additionally, the developer has retained CBRE to broker the sale of the Third Avenue building.
Cohen’s attorneys will likely have time now to formally argue against a receiver, with Fortress responding, before the judge makes a final decision on the matter.
Fortress declined to comment.
The judge’s decision is the latest in a year-long saga between Cohen and the creditor after he personally guaranteed a $534 million loan portfolio and then defaulted. An appellate court decided in Fortress’s favor in February and a lower court entered the $187 million judgment against Cohen the next month.
Cohen lost the buildings that backed the original portfolio after Fortress took them in what was among the largest UCC foreclosures of all time.
The lender has since accused Cohen of trying to shield his assets. He has fired back, saying he transferred his house in Greenwich and his 220-foot superyacht to a trust for his wife’s benefit “in consideration of almost 20 years of marriage.” Fortress estimated the Greenwich property is worth $20 million and the yacht $50 million.
That’s not the end of Cohen’s woes. He’s at risk of losing 750 Lexington Avenue after its special servicer won a summary judgment in a foreclosure case last week. Cohen had personally guaranteed the $130 million loan connected to the 31-story office building.
— Lilah Burke
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