A court has ordered Maverick Real Estate Partners to pause foreclosure proceedings on a property after the borrower accused the lender of improper conduct during a loan extension process.
The dispute involves Hilson Management and the Schwalbe family, who owe $41 million to an affiliate of Maverick. According to a complaint filed by the borrowers, when they attempted to extend their loan, Maverick’s affiliate initially agreed to accept a $400,000 fee but then failed to honor the agreement after receiving payment.
Maverick is known for its aggressive approach in real estate lending, often purchasing debt with the intention of foreclosing on properties. The complaint describes tactics that may be considered excessive by legal standards.
The property at issue is the Gorham Building at 390 Fifth Avenue, which has been associated with the Schwalbe family since at least 1969. The original agreement allowed for a loan extension if certain conditions were met. The borrowers paid an initial $200,000 extension fee, but Maverick reportedly demanded additional payments beyond what was outlined in the contract. After negotiations, both parties agreed on a $400,000 sum; however, Maverick later increased this demand to $750,000 and ultimately insisted on a $1.5 million payment before threatening foreclosure.
Despite not declaring an event of default, Maverick implemented a full cash sweep on the property’s income. This action left the borrowers unable to cover operating expenses.
Attorneys Terrence and Darren Oved from Oved & Oved stated: “Our client’s $50 million damages claim underscores the significant harm caused by Defendant, a harm which we intend to remedy.” They added that the court’s order signals that coercive tactics will not succeed.
Maverick and its legal representatives did not immediately respond to requests for comment. In correspondence with the court, Maverick’s attorneys argued that plaintiffs misinterpreted the loan agreement and asserted that payment of interest shortfall was clearly required for any extension.
