HFZ fights back against “predatory” lender on condo buildings

The Uniform Commercial Code, which governs commercial transactions in the U.S. says that auctions like this one must be commercially reasonable. The sale, which was arranged in just two months, scheduled in the middle of a pandemic and will only sell the individual loans as one package, is far from that, HFZ argued in court papers. It would also make it impossible for the developer to sell more condo units in hopes of paying off more debt.

“The appropriate way to auction off the membership interests would be to allow a bidder to bid not on only the entire portfolio but to allow bidders to bid on one, two three or all four or any combination,” said Y. David Scharf, one of HFZ’s lawyers on the case. 

Feldman’s company acquired the properties—88-90 Lexington Avenue, The Astor at 235 West 75th Street, and Fifty-Third and Eighth at 301 West 53rd Street—

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HFZ Capital Sues CIM To Stop Manhattan Condo Loan Auction

HFZ's Ziel Feldman and CIM's Shaul Kuba (Getty, iStock)

HFZ’s Ziel Feldman and CIM’s Shaul Kuba (Getty, iStock)

UPDATED, Nov. 12, 2020, 2:28 p.m.: HFZ Capital Group is making a last-ditch attempt to stop its lender from auctioning off loans tied to four of the firm’s Manhattan condo projects.

The prolific developer filed a lawsuit seeking a preliminary injunction against CIM Group to prevent the lender from proceeding with an auction planned for Thursday at noon. On Wednesday, a judge temporarily put a halt on the auction. HFZ’s attorney, David Scharf of Morrison Cohen, said a judge may rule next week on whether to permanently stop the sale.

HFZ, led by Ziel Feldman and Nir Meir, alleges that CIM’s planned auction is a “predatory attempt to capitalize on the Covid-19 pandemic by conducting a rushed, commercially unreasonable sale,” which would pave the way for CIM to take over four properties: 88-90 Lexington Avenue, The Astor at 235 West 75th

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HFZ Capital Industrial Foreclosure

Ziel Feldman and (clockwise from top left) 2121 North 161st East Avenue, Tulsa, OK; 707 Spence Lane, Nashville, TN; 1600 East Butler Avenue, Flagstaff, AZ; and 500 Bailey Avenue, Buffalo, NY (Getty, Google Maps)

Ziel Feldman and (clockwise from top left) 2121 North 161st East Avenue, Tulsa, OK; 707 Spence Lane, Nashville, TN; 1600 East Butler Avenue, Flagstaff, AZ; and 500 Bailey Avenue, Buffalo, NY (Getty, Google Maps)

Ziel Feldman’s financial problems keep piling up.

The HFZ Capital developer — already battling lenders on a handful of high-end Manhattan residential developments — is facing foreclosure on his stake in a portfolio of national industrial properties.

Chicago-based credit investor Monroe Capital has moved to foreclose on a roughly $126 million loan HFZ owes on the 13-property portfolio, according to public documents and sources familiar with the matter.

The auction is scheduled to take place in Manhattan on Dec. 2. A principal at HFZ, however, insisted that the auction has been called off and is no longer moving forward.

The principal pointed to a decision on a motion in an August lawsuit Monroe Capital filed against

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