Judge Orders Aby Rosen, Michael Fuchs To Pay Lender $18M Following Default At 285 Madison
RFR Holding's Aby Rosen and Michael Fuchs now have an $18M judgment to pay, the latest in a series of financial troubles across their expansive real estate portfolio.
A New York Supreme Court judge ruled this week that Rosen and Fuchs must pay $18.1M, plus interest and attorney's fees, after defaulting on two mezzanine loans tied to 285 Madison Ave.
Judge Anar Rathod Patel granted the lenders behind those mezzanine loans, two Korean debt funds managed by DAOL Asset Management, the right to collect the payments after ruling they could enforce personal guarantees against Rosen and Fuchs following their default in February on a $120M senior mezz loan and an $85M junior mezz note, according to court records.
The ruling came after the lenders filed a motion for summary judgment, which allows for a quicker resolution than a lawsuit. RFR's attorneys claimed the lenders weren't entitled to summary judgment, but Patel overruled them this summer and sided with the Korean lenders on Wednesday in a decision entered Thursday. The Promote first reported the judge's ruling.
Rosen and Fuchs also have a $220M CMBS loan and a $33M B note tied to the property. The senior loan was transferred to special servicing in April, shortly before its previous maturity date in May. Rosen then negotiated a short-term extension for the loan.
The maturity date was moved to Nov. 11. A special servicer has since reached out to RFR seeking an update to those maturity plans, according to Oct. 7 commentary in Morningstar Credit’s database.
“RFR remains committed to 285 Madison and looks forward to working with the special servicer,” an RFR spokesperson said in a statement to Bisnow.
Rosen, who has been the owner of several quintessential New York properties, is now scrambling to retain them, with varied success.
At the Chrysler Building, The Cooper Union, the private college that owns the land beneath the property, has asked a judge to evict Rosen from the tower. Cooper Union claims that it has terminated its ground lease agreement with the developer after RFR stopped making rent payments.
Rosen has sued Cooper Union, claiming the school should renegotiate the ground rent and has frustrated his ability to attract office tenants.
He also sold off a Gowanus development site this month for $160M after selling 980 Madison Ave. to Bloomberg Philanthropies for $560M just before the Gagosian Gallery, which occupies more than 40% of the building, planned to exit its lease.
At the Seagram Building, Rosen managed to lock in a $1.1B refinancing last year. Earlier this month, global alternative asset manager Blue Owl Capital expanded its lease in the office building. By nearly doubling its footprint, Blue Owl’s lease brings the building at 375 Park Ave. to almost fully occupied.
