The legal and financial woes continue for developer Benjamin Ringel, whose Armstrong Capital is being sued over $35 million in unpaid loans that were extended for a bankrupt New Jersey shopping mall.
Jeffrey Krasnoff’s Rialto Capital Advisors filed a lawsuit in in Manhattan Supreme Court over the failed Commons at Manahawkin Village in southern New Jersey, The Real Deal reported. Manhawkin is an upscale shopping center located at Route 72 and Garden State Parkway, Exit 63 with retailers such as retailers TJ Maxx, Staples, K Mart and Pier One that holds a total of 321, 000 square feet of floor space. It first opened in 1993.
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The mall’s owners filed for chapter 11 in June.
Tibor and Gershon Klein, partners in the mall with a 47% stake, did not approve of the bankruptcy filing and tried to stop it asserting that Ringel needed their support in order to make such a filing.
They hope either refinance or sell the mall, instead of declaring bankruptcy. As their lawyer Abe Beckenroth told The Real Deal, “We are discussing the matter with Rialto and hopefully will come to some sort of resolution.”
Last September a $31 million CMBS loan against the Commons at Manahawkin Village was transferred to special servicing because it’s expected to default.
This latest financial crisis follows a similar lawsuit that was brought in June over the same mall by Arcadia Realty seeking restitution over $9 million in outstanding loans. Arcadia alleged that Ringel and his partners had defaulted on the loans in July 2013 when they failed to make scheduled interest payments.
Armstrong Capital is also under threat of a suit over $250, 000 in unpaid rent for their offices at 360 Madison Avenue.