Thor sues Lightstone, claiming that the latter helped former Thor employees violate their obligations.
According to documents filed in the New York Supreme Court, Thor Holdings has filed a lawsuit against David Liechtenstein Lightstone, CEO of Lightstone, and the presidents Mitchell Hochberg and Executive Vice President, as well as general counsel Joseph Teichman, for allegedly helping former Thor employees “break fiduciary obligations.” The lawsuit seeks approximately 80 million dollars.
While there wasn’t much information in Thor’s notice in New York, Teichman clarified that the case was similar to one Thor had filed in Maryland Court the previous year. According to the complaint, Lichtenstein & Hochberg helped former Thor Vice Chairmans William Hunter & Jonathan Scheinberg arrange the 133 million dollar purchase of a North Bethesda industrial facility. Both kept up their employment with Thor during that time.
David Lichtenstein Lightstone’s Bank Problems
An attempted $8 billion forced takeover attempt of Prolonged Stay Resorts was masterminded by real estate mogul David Lichtenstein Lightstone in 2007. He is currently facing accusations of unfair advantage and corporate waste about a financial institution that he partially controls.
David Lichtenstein Lightstone was sued by a lesser investor in the Park Avenue company, who said that Lightstone had deceitfully transferred profits through the company to a different loan entity. A car dealership filed a separate case alleging that the bank had utilized predatory lending practices to force it to offer $300,000 worth of cars—mostly Cadillacs—to bank officials and their families at a discounted price.
The legal processes are reportedly among the most recent problems to befall the $548 million holdings of the New York financial organization. The CEO, Charles Antonucci, resigned in November. The Federal Deposit Insurance Corporation has previously ordered Park Avenue Bank to maintain higher capital percentages.
It also recommended that the institution stop using managerial practices that it felt jeopardized the security of its assets. According to the Federal Deposit Insurance Corporation, there is reason to believe the financial institution broke the law and engaged in risky or unlawful banking practices.
Park Avenue Bank made an announcement stating that it is in discussions with stakeholders and is dedicated to reinvesting.
In an announcement, a representative for David Lichtenstein Lightstone rejected the lawsuits and stated that Lichtenstein is now a small landowner who has no say over decisions made by the lender.
According to the spokesman, the minority buyers’ complaint, which was brought by the Turkish rental company Iktisat Finansal Kiralama, is a frantic and obvious attempt to put pressure on the company to avoid having to pay a judgment of ten million dollars.
A $9.4 million verdict was awarded to David Lichtenstein’s ownership group against Iktisat’s owner in relation to David Lichtenstein Lightstone. Then, according to his claim his reputation was damaged because he made an exchange decision on some of the lender’s equities ten years prior, and those stocks lost value.
As to the document, David Lichtenstein, who founded and served as the CEO of Lightstone Group, ventured into the banking industry by acquiring a majority stake in Park Avenue Bank. Through Turkish businessman Erol Aksoy, who was in charge of Iktisat Finansal Kiralama, an agreement was made. David Lichtenstein Lightstone appointed Antonucci to lead the bank’s operations and joined the board of directors.
The goal was to give Federal Deposit Insurance Corporation-insured customer deposits to small-scale residential development companies. Court documents state that David Lichtenstein and Antonucci founded Park Avenue Funding at the same time as a property lending subsidiary of Lightstone Group, with David Lichtenstein Lightstone owning the majority share.
Antonucci quickly grew the financial company, but things weren’t going as planned. The bank installed an expensive museum-caliber visual arts show in its Manhattan office. Even though total equity investment dropped from $22 million to $12 million, Park Avenue Bank’s net worth increased from $100 million to $548 million.
The financial corporation shed a total of $11.3 million in the previous fiscal year & maintained a top-level capital utilization ratio of 3.35 percent as well. Federal banking laws state that Park Avenue Bank is still undercapitalized.
Though he was replaced in the bank by most of the directors and officials who started with him, David Lichtenstein Lightstone left. Although Park Avenue Bank maintains that this is no longer the case, Park Avenue Bank & Lightstone Group had offices on the same floors of a downtown Manhattan institution. Park Avenue Funding moved its main office from that spot.
In a state court complaint filed in New York, Iktisat Finansal Kiralama claimed that Park Avenue Funding was associated with mortgages made and funded by Park Avenue Bank. The total amount of money Park Avenue Funding invested in the loans exceeded 63 million dollars.
As per the complaint, Park Avenue Funding paid interest rates that were significantly higher than the interest rate that the institution got, but the consumer received an equivalent composite pricing for the aforementioned transactions.
As per the lawsuit, Park Avenue Bank participated in non-arms-width activities, which included subleasing its owned or rented assets to firms led by David Lichtenstein Lightstone.
A representative for Park Avenue Financing, Angelene Taccini, said that the company’s interactions with a financial institution happened remotely with the approval and understanding of the appropriate regulatory organizations. Tacchini added that Park Avenue Funding had first experienced a loss on the mortgages in which it was involved.
In recent weeks, Park Avenue Bank has been the target of multiple bad loan charges. Of particular note are three claims that the bank’s nine million dollars in non-performing loans are held by Timothy Martin and Cadillac dealers in the New York area.
Martin, a client of Park Avenue Bank, has filed a complaint accusing the company of lying. Martin goes on to explain that the bank forced the company to trade in Cadillacs without considering the needs of its employees or their families, and penalized him with exceeding the credit limit. The complaint states that Antonucci obtained a $75,000 Cadillac Escalade in addition to an automobile from his spouse, which she traded in for a $50,000 brand-new Cadillac SRX. Martin asserts that he has a nine-million-dollar debt from the financial institution.
Park Avenue Bank disputes the rest of the case, claiming that Martin’s mortgage was accurately and completely documented.
Antonucci would prefer not to comment on this. According to a bank official’s statement, his decision to quit was allegedly motivated by health issues. Last year, Antonucci gave $6.5 million of his own free will to help recapitalize Park Avenue Bank, which gave David Lichtenstein Lightstone a minority share.
A representative for David Lichtenstein claims that since 2005, he has had minimal influence over the way the bank runs.
As to the Forbes website, David Lichtenstein Lightstone, who gained prominence in the market with his massively financed acquisition of Extending Stay Resorts, may suffer more setbacks if his attempt at Park Avenue Bank fails.
In June, the hotel company filed for bankruptcy, threatening to sue its creditors, including the Federal Reserve. The US government will probably be burdened with yet another expense by Park Avenue Bank.
The FDIC: What is it?
The FDIC is also known as the Federal Deposit Insurance Corporation. It is a government organization that provides insurance for assets held in US banks, including sparse in the event of bankruptcy. In order to maintain public trust and security in the banking sector, the FDIC was founded in 1933 and is dedicated to promoting moral banking practices.
If the financial institution is an insured business, each customer’s assets up to $250,000 are protected by the FDIC. Consumers ought to verify whether the bank they choose is covered by the FDIC.
The main objective of the FDIC is to protect against bank crises, which hurt a lot of institutions during the Great Depression.
During that time, for example, when a bank was going to be liquidated, a few scared customers rushed to take their money out.
A lawsuit over Lightstone Directors is filed by Joe Sitt
Just a few days before filing the lawsuit, Joe Sitt’s business discarded its complaint over three Lightstone Group officials in the United States. In a conflict with another New York City real estate magnate, Thor Holdings has thrown in the towel.
Thor was suing for eighty million dollars in damages, claiming that David Lichtenstein Lightstone, the CEO of Lightstone Group, and employees Mitchell Hochberg and Joseph Teichman had helped two former Thor administrators break their fiduciary duties.
In their notification to the tribunal, Thor’s attorneys, Joseph Matalon and Stella Sainty of Wachtel Missry, were unable to explain their decision.
Conversely, Lightstone Group held a viewpoint. Lawyer Solomon Klein for the Lightstone managers said that Thor’s acts in the city were considered absurd and deceptive.
According to court records, the disagreement in New York is currently resolved, but the two firms continue to engage in legal battles. Thor is still suing Lightstone Group in the state of Maryland. A seven-day jury trial for a different case that was filed in April 2021 is scheduled for this coming week and the days that follow.
A transaction between Lightstone Group & Outreach Properties LLC, a business founded by former EX-Thor employees Jonathan Scheinberg & Bill Hunter, is the subject of the Maryland complaint. Before they left Thor, Thor accused Lightstone Group of working with Scheinberg & Hunter on a deal to purchase two offices in Maryland.
About David Lichtenstein Lightstone
David Lichtenstein is the Chairman and CEO of Lightstone Group LLC. The year it was founded was 1988. David is in charge of managing all aspects of the company’s diverse inventory of multifamily, greetings, office and manufacturing properties in addition to serving as the organization’s board chair.
Considered one of the biggest retail transactions in American history, David Lichtenstein Lightstone paid $638 million for Prime Retailing in 2003. Bill de Blasio, the mayor of New York, then elected Mr. Lichtenstein to the board of directors of the NYC Economic Growth Corp. David Lichtenstein Lightstone was a member of the Public Budget Committee and a trustee on the Real Estate Association of New York.
The Bottom Line
David Lichtenstein Lightstone is an American businessman and billionaire who invests in real estate. Lightstone Group oversees 23,000 rental flats spread across 120 locations in 28 states. Additionally, Lightstone Group and Marriott are collaborating on the Moxy brand of town hotels, which targets millennials.
He invested $200 million in stock and $7.4 billion in loans for Extended Stay America, a chain of moderately priced resorts, in 2007. Due to the economic downturn, the bankruptcy court declared Extended Remains insolvent. Lightstone Company then sold 20 locations for a total of $2.3 billion. A $100 million penalty was declared due to David Lichtenstein Lightstone by a New York Court.
