Debtor 96 Wythe Acquisition Brings a Lawsuit for $20M Against Benefit Street Partners Realty
January 6, 2022, Southern District of New York – Plaintiff Debtor 96 Wythe Acquisition LLC, a boutique Williamsburg Hotel, initiates a lawsuit against Defendant Benefit Street Partners Realty Operating Partnership, LP to recover damages from Defendant for alleged “breach of contract”, “breach of its implied duty of good faith and fair dealing”, “unjust enrichment”, and “conversion of the Debtor’s property.” The lawsuit also asserts an objection to the portion of Benefit Street’s claim relating to the continued accrual of interest allegedly at excessive rates, together with other charges asserted against the Debtor.
Specifically, the complaint alleges that Benefit Street improperly caused an additional 0.5% per annum in interest to be charged on loan and allegedly “erroneously asserted the existence of defaults under the loan documents”, which improperly created a compounding liability for 96 Wythe. The complaint also contends that Benefit Street deprived the Debtor of the benefit of its bargain by allegedly “contriving defaults” against the Debtor and refusing to adequately communicate to the Debtor amounts necessary to cure monetary defaults under the loan agreement. 96 Wythe further accuses Benefit Street of “acting in a manner that prevented the Debtor from exercising its extension options” under the loan agreement, refinancing its debt to the Benefit Street, or otherwise improving its capital structure.
Accordingly, the Debtor requests the Court for an order and judgment against Defendant for at least $20,000,000, plus interest. The Debtor also seeks an order against Benefit Street disallowing its claim in its entirety until such time that it returns property of the estate that it has “wrongfully retained.” The complaint also adds that even upon returning such property, Defendant’s secured claim should be allowed in an amount that should not exceed $70.7 million and requests the Court to disallow the balance.
In re 96 Wythe Acquisition LLC, Case No. 22-07002- RDD