Creditors’ Rights Department Wins $135 Million Judgment Against Real Estate Developer Meyer Chetrit

Our Bankruptcy and Creditors’ Rights Department advised a well-known debt purchaser in acquiring three defaulted loans in connection with the development of a 33-story world class hotel in midtown Manhattan and then conducting an Article 9 UCC foreclosure sale of the junior mezzanine membership interests in the property’s fee owner. Thereafter, the lender brought an action against the borrower’s principal Meyer Chetrit, one of NYC’s most prolific real estate developers, on various guarantees, including a guaranty of completion, a bad act guaranty, and an interest reserve guaranty. Chetrit asserted a number of defenses in lender’s action and separately caused the defaulting borrower to bring its own action against the lender claiming that the lender did not conduct a commercially reasonable UCC foreclosure sale. The upshot: The Court dismissed all of Chetrit’s defenses, found that the UCC sale was conducted in a commercially reasonable manner, entered a money judgment against Chetrit for over $135 Million, and dismissed the entirety of Chetrit’s complaint against the lender. This case is significant given the limited case law on completion guarantees and the technical intricacies of conducting a commercially reasonable UCC foreclosure sale.

The Decision + Order Granting Summary Judgment and the Judgment can be reviewed by clicking their respective link. Steven Newman, Robert Abrams, and Daniel Walfish litigated these cases to a successful conclusion.