"The retail titan and head of Wharton Properties fired back against the German bank Helaba after the lender initiated a foreclosure on his property at 27-29 West 34th Street earlier this year. Sutton's lawyers, Darren and Terrence Oved of Oved & Oved, are now seeking sanctions and attorney fees from the lender Landesbank Hessen-Thuringen, also known as Helaba, claiming the lender's move to pursue Sutton was a transparent, orchestrated attempt to tarnish his reputation."
"Helaba initially provided a $50 million loan in 2018 for the three-story building. But the lender filed a lawsuit in New York Supreme Court in September, alleging the building owner defaulted and failed to pay over $12 million in real estate taxes to New York City. Sutton was also named as a defendant in the lawsuit because he signed a limited guarantee."
"At the crux of Sutton's new legal filings is his limited personal guarantee, which would only make him liable in instances of fraud or other intentional misrepresentations. The lender claimed Sutton's unpaid tax bill put him in default. But by Sutton's account, the property's value was decimated by Covid. The property's valuation, along with others on 34th Street, was slashed. Two of the property's prior tenants Geox and Aldo entered bankruptcy, further cutting into rental revenue."
Jeff Sutton, head of Wharton Properties, faces foreclosure on 27-29 West 34th Street after Helaba sued claiming default and more than $12 million in unpaid real estate taxes. Helaba made a $50 million loan in 2018 and named Sutton under a limited guarantee. A temporary receiver was appointed for the building while Sutton's lawyers moved to dismiss and seek sanctions and attorney fees, alleging the lender aimed to damage Sutton's reputation. Sutton contends the property's valuation plunged during Covid, prior tenants Geox and Aldo filed bankruptcy, and the city overstated gross rental income used for tax assessments.
Read at therealdeal.com
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