A New York State Supreme Court judge has ruled that Charles Cohen owes creditor Fortress Credit Corp. $187.25 million if a scheduled auction of assets including Landmark Theatres doesn’t cover the $500+ million the New York real estate magnate owes.
The repayment of that 2022 loan has been in dispute for a year. The parties agreed to a number of extensions in 2023 but ultimately Fortress called the loan. It claimed Cohen was in default and sued for an auction of the underlying collateral properties, which, along with Landmark, include a design center, office tower and hotel.
The suit played out over this past summer and Judge Joel M. Cohen in August ultimately ruled for Fortress, setting a Nov. 8 auction date. In a statement to Deadline then, a rep for Landmark said, “Despite the complexities of this commercial situation, Landmark remains dedicated to its business and anticipates a favorable resolution to the ongoing litigation.”
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The loan guaranty for $187.25 million — plus costs, legal fees and expenses — signed by Cohen is a side issue that Fortress sued to enforce. As the judge wrote, it was meant “to ensure repayment (in part) of a loan made to Cohen Realty Enterprises LLC (“CRE”) and related entities (with CRE, the “Borrowers”) in the original aggregate principal amount of $533,641,618.”
“Plaintiff motion is granted. Defendant’s cross-motion to dismiss is denied and his counterclaims are dismissed,” he wrote.
The ruling on the guaranty doesn’t impact Landmark, and, Deadline hears, will likely be appealed.
The judge had earlier denied Cohen’s requests for a preliminary injunction as well as a request to move the auction date later.
The judge initially had given the parties time to reach an agreement on restructuring the loan. It’s always possible the sides will settle.
If the auction does move ahead, however, it would be one of the biggest in New York real estate history under the so-called Uniform Commercial Code (UCC).
Cohen acquired Landmark, once the crown jewel of indie theater circuits, from Mark Cuban and Todd Wagner in 2018, arguably tough timing with the exhibition industry hit in swift succession by Covid and Hollywood strikes.