Lender Seeks Receiver for Chetrit’s Seventh Ave Properties

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A lender in a foreclosure case against Meyer Chetrit and other developers is aggressively pursuing a receiver for the properties.

Specifically, the lender has raised concerns about intentional self-dealing and diversion of funds by the Chetrits. Investors Joseph Moinian and Edward Minskoff are also named as defendants in the case. At the heart of the claims are properties at 500 and 512 Seventh Avenues, a Manhattan office building and home to the Chetrit Group headquarters. American General Life Insurance Company, The Variable Annuity Life Insurance Company and The United States Life Insurance Company filed the suit.

In a filing submitted Friday, the lender urged the court to decide quickly on the matter of a receiver for the leasehold of the property. Defendants have known about the case since July 11 and made no official response, an attorney for the plaintiff wrote to the court.

The concerns raised in the case go beyond simple financial trouble. The lender claims the borrower transferred about $1 million of tenant security deposits to outside accounts. About $300,000 was transferred to accounts associated with other Chetrit projects or affiliates, according to court documents. Those include LLCs tied to the Chetrits that own property in Hollywood Beach, Florida, and townhomes at 110 and 125 East 64th Streets. Another transfer of $50,000 was made to Leo Jacobs, an attorney who has represented the Chetrits previously. Jacobs did not immediately respond to a request for comment for this story.

“This indicia of intentional self-dealing, diversion and misappropriation of cash flow further requires the appointment of a receiver to protect Lender’s collateral,” Michael Driscoll, a lawyer for the lender, wrote to the court.

The borrower also failed to collect rent from the Chetrit Group, which has its headquarters in the 512 property. Since 2023, the development firm has racked up more than $1 million in back rent, the plaintiff alleges.

“[T]his failure by Borrower is evidence of self-dealing or, at a minimum, severe negligence and mismanagement by Borrower in its capacity as sublessor in connection with the Mortgaged Property when taking into account that Guarantor Chetrit is an insider of Borrower,” Driscoll wrote to the court.

A representative for the Chetrit family declined to comment. Edward Minskoff declined to comment. Driscoll and Moinian could not immediately be reached for comment.

In addition to the self-dealing claims, the lender alleges the defendants failed to make timely payments on the loan beginning in February of last year, and revenue failed to cover payments in November.

More recently, Con Edison planned to cut off electricity at the properties if the partnership didn’t make a dent in its $2.4 million electricity bill by July 2, according to the complaint. The lender made an advance payment to the borrower, allowing the property manager to pay the bill.

The official borrower is 500-512 Seventh Avenue LP, which acquired the leasehold in 1999 for $140 million. Meyer Chetrit, Moinian and Minskoff guaranteed the $375 million loan in 2018. However, the loan had non-recourse carveouts, meaning the lender can only pursue the collateral unless the guarantors commit a bad act.

512 Seventh Avenue is a 45-story tower with 544,300 rentable square feet, while the 500 property is an 18-story building with 676,500 rentable square feet. 228 West 38th Street, also included on the loan, is a five-story commercial building with 10,000 rentable square feet.