Charles Cohen can’t do right by his creditor, Fortress Investment Group.
This week, Cohen sold the office building at 3 East 54th Street in the Plaza District to Vornado Realty Trust for $141 million, Bisnow reported. Steven Roth’s firm applied the $107 million debt it bought against the property over the last two years towards the purchase of the building, which it plans to raze.
The sale would seem to be good news for Cohen, who is scrambling to raise cash after a New York judge ordered him to repay $187 million personally guaranteed to Fortress.
But the final sale price proved to be a pittance compared to what once was. In court documents this summer, Cohen Brothers Realty claimed it agreed to sell the property to an unnamed buyer for $188 million. The funds were expected to arrive by international wire transfer.
They never did, though, leaving Cohen with few options to sell the 300,000-square-foot building, in which it owned a 63 percent stake. In stepped Vornado, which moved quickly to finalize the transaction. It’s expected to generate $30 million to pay down the judgment, according to the firm representing Cohen.
In a letter to a judge, attorneys for Fortress said the deal was a “very far cry from satisfying the judgment debt,” claiming the creditor was blindsided by the deal. The company wants to subpoena Cohen for financial records and have a pair of properties put into receivership.
Fortress declined to comment to the publication, while Cohen did not respond to a request for comment.
Cohen also recently sold 623 Fifth Avenue to Vornado for $218 million. That sale was expected to generate $70 million towards paying the debt to Fortress, but only $30 million has been provided to the creditor from that deal so far, according to court filings.
Fortress has been trying to recoup more than $500 million it says Cohen defaulted on. The private equity giant has accused him of shifting assets — including his Connecticut home and 220-foot yacht — into his wife’s name, allegations Cohen denies.
— Holden Walter-Warner
Read more
Charles Cohen’s 750 Lex headed to auction block
Judge says Charles Cohen can sell buildings himself for $187M bill — for now
Charles Cohen to sell another distressed office building
