Jewish Borrowers' Properties Captured

 Beginning in approximately 2006, Canyon Partners made a loan to River Drive Partners LLC in Miami-Dade County, Florida that resulted in foreclosing on the borrower’s property in May 2007 in connection with an approximately $16 million loan.  According to attorneys and the widow of the developer, Canyon manufactured defaults to force into foreclosure the East Coast Fisheries property, which had been in the Swartz family for generations.  According to the attorney for River Drive Partners LLC, Canyon's loan was “death-spiral financing” designed to lead to the property owner’s downfall.  In conversations with Rebecca Swartz, the widow of the developer, Ms. Swartz reflected about Canyon Partners, “They steal your money, steal your time, steal your property, and steal your future." Soon after her husband's property and life-savings were lost to Canyon, Mr. Swartz was diagnosed with cancer and died shortly thereafter.

A Canyon Partners entity loaned approximately $12,400,000 to 110 Green Street Development LLC, a 131-unit residential redevelopment project.  In an all too familiar pattern, the project was forced into bankruptcy. The Debtor stated in court filings that it had concluded “that by late January of 2009, the Canyon Partners affiliate adopted a ‘battle-ready’ position and sought to declare the Debtor in default on a number of trivial and pretextural matters” and “was intent on capturing the inherent potential of the Project for itself.” The realdeal.com wrote that "the developer filed for bankruptcy to protect the building from the mezzanine lender Canyon-Johnson, because it feared Canyon Capital might pursue a 'loan-to-own' strategy and take control of the building." Canyon was referred to as a "vulture fund" in bankruptcy pleadings and that it "loans to own".

Bankruptcy records reveal that in March 2009, Canyon Partners sought to dismiss the Debtor’s bankruptcy petition, as Canyon has successfully done many times.  As part of that effort, Canyon's Co-Head of Real Estate, Maria Stamolis, represented to the bankruptcy court that the project was “not even remotely suitable for occupancy” giving the impression to the court “that the Building still requires extensive construction,” and that the Debtor remained in default for not meeting the construction completion date. Yet in fact, Stamolis knew that the Debtor had obtained a final certificate of occupancy on January 28, 2009. The developer's bankruptcy filing said that Maria Stamolis's "assertions regarding construction are disingenuous in the extreme, particularly since she knows full well that the Debtor obtained a final certificate of occupancy for the Building on January 28, 2009", which was attached to the court filing. The filing went on to say, "The issuance of a final certificate, of course, speaks volumes as to the true state of construction and exposes the Mezzanine Lender's false innuendos and misrepresentations." It went on to say, "Stamolis, in turn, personally 'congratulated' the Debtor for its efforts on January 30, 2009, only to submit a dubious affidavit a scant three weeks later, falsely declaring that the Project is woefully incomplete..." The Court pleadings said that Canyon's entity was "groping for issues to press its own agenda." Also, the Debtor stated that Canyon's “assertion that the Building’s purported appraised value has fallen to between $39-44 million” was a lie, since it knew that the Fannie Mae appraisal reflected “a much higher value.”  

Read more at: https://www.cityrealty.com/nyc/greenpoint/110-green-street/review/43961 

Case Cite: In re 110 Green St. Development LLC, US Bcy Ct (ED NY), Case No. 09-40860, Doc 30.

A Canyon affiliate made a loan to Waterbridge Capital and investor Jack Jangana to redevelop the 1 million-square-foot Broadway Trade Center in downtown Los Angeles. Completed in 1908, the nine-story structure was originally home to the A. Hamburger & Sons department store until the May Co. acquired the property in 1923. As the May Company Building, it housed the retail store until the mid-1980s, when it became a multi-use retail trade center. 

Waterbridge and Jangana bought it to transform the vintage property into a premier destination that offers creative office space and flagship retail spaces on the ground and second floors while also respecting its historic architecture. 

In 2014, according to the developer, Canyon Partners tormented them by creating a relentless series of default notices beginning immediately after the loan documents were signed.  

The developer, Joel Schreiber, said that Canyon put his entity into default approximately two days after the loan closed and thereafter the entire loan relationship with Canyon was miserable.  He said that Canyon refused to fund the last $20 million too.  Schreiber said he didn't take a vacation and was miserable for years dealing with Canyon.  Finally, he said that he had to overpay by millions of dollars otherwise Canyon refused to discharge their mortgage.