Steve Croman has made his fair share of enemies as a landlord. Add his father to that list.
Edward Croman is looking to dismantle the family partnership that controls 64 multifamily properties across Manhattan, according to a lawsuit filed Monday in Manhattan Supreme Court. The elder Croman accuses his son in a lawsuit of engaging in “rampant fraudulent mismanagement” that makes continuing to work together “not reasonably practicable or financially feasible.”
Edward alleges in the suit that Steve refused to pay him distributions from rental income generated from the properties or proceeds from the sale of six properties in 2022. He also claims his son refused to pay back loans Edward made to the properties, and tried to eliminate Edward’s rights from the operating agreements in order to refinance more than $130 million in loans.
“Unfortunately, Edward cannot choose his children and Steven happens to be a
known fraudster who has turned his illegality against his father,” the lawsuit states.
Representatives for Edward and Steve could not be immediately reached for comment.
Edward is seeking the dissolution of the Croman family real estate entities.
At the heart of the allegations, Edward alleges that Steve never provided his father with any distributions from refinancings or sales. Instead, Steve kept all rental income for himself, according to the lawsuit.
Edward further alleges that Steve siphoned off proceeds from “secret sales of properties,” including: 89 Clinton Street, 450 West 50th Street, 186 Avenue B, 188 Avenue B, 222 Avenue B and 217 Elizabeth Street.
Steve gained a reputation throughout the early 2000s as one of Manhattan’s worst landlords, facing accusations that he harassed tenants throughout his vast portfolio.
That made him a political target, and though criminal harassment was difficult to prove, Steve in 2017 was convicted of mortgage fraud and sentenced to one year in jail on Rikers Island. He served eight months of the sentence and was released in June 2018.
As part of a settlement with the state attorney general’s office, he gave temporary control of more than 100 buildings to Michael Besen’s New York City Management. And he also went back to business, snapping up properties and remaining very active in dealmaking.
But fallout from the 2019 rent laws and rising interest rates have taken their toll, and in recent years, Steve has been hit with foreclosure cases and lawsuits.
Lilah Burke contributed reporting.
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