Aby Rosen and Michael Fuchs, the real estate tycoons behind RFR Holdings and the owners of Lever House and the Seagram building, had been planning to build a Shangri-La hotel on Lexington Avenue and 53rd Street. That was before all the economic messiness, of course, and last month the project was dealt a death blow when several banks foreclosed on the property. Now the already bad situation is getting worse.
The banks that loaned Rosen and Fuchs some $145 million to build the hotel have filed suit against the duo. Personally. Per Crain's:
Some experts were surprised that the sophisticated duo would agree to personally guarantee a loan since real estate developers are known to finance projects largely with other people's money.
On the plus side, if the suit ends up moving ahead, you can expect to see some of the best contemporary art on the planet go up for auction at Sotheby's next year.