We helped Anglo Irish Bank Corporation in a complex foreclosure against a developer who became emblematic of the dramatic fall of some high-profile dealmakers during the New York City housing bust.
The developer's 23-story, 302-unit leasehold condominium at 225 Rector Place in New York City ran into trouble at the outset of the financial crisis. When the developer defaulted on an aggregate $165 million acquisition and construction loan, we worked with Anglo Irish and its co-lenders, Fortress Credit Opportunities I, L.P. and Drawbridge Special Opportunities Fund, Ltd, to foreclose and to fend off a lender liability lawsuit.
The case was complicated because the developer raided the condo's reserve fund, leaving the project unfinished, unsafe and insolvent. Herrick persuaded the court to grant emergency powers to the receiver to complete construction and to market the units for sale so the lenders would have some chance to recoup their investment. The court also dismissed the lender liability lawsuit and appointed a referee to asses the value of the property and determine damages.
Herrick also worked with the Office of the New York State Attorney General to help in its decision to file disciplinary actions against the developer for defrauding buyers out of more than $7 million when it raided the reserve fund.