A New York-based investor has been slapped with a $205M lawsuit from lender Wells Fargo in an effort to recover the cost of its loan on the Chicago Civic Opera Building, a 45-story downtown office property.
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Michael Silberberg, founder and CEO of Berkley Properties, was first served with a foreclosure suit for the 20 North Wacker Drive tower known as 601W in 2021, one of the most notable such lawsuits after the onset of the coronavirus pandemic.
In that suit, per Crain’s Chicago Business, Wells Fargo alleged Berkley Properties had defaulted on the property by failing to make monthly payments for four months. The Cook County Circuit Court appointed real estate services firm Transwestern as the 915K SF building’s receiver that same year.
Wells Fargo’s latest suit takes aim at Silberberg as an individual, The Real Deal reports, asserting he failed to meet his obligations as the loan’s guarantor. The suit was filed in New York federal court.
Silberberg’s Chicago-based attorney Gerald Lurie, who is not expected to represent his client in the New York suit, said Silberberg would contest the claim, telling TRD it has not been established Silberberg has liability for the mortgage and would have had to commit triggering events for that to be proven — something he said has not happened.
“In our view, a lawsuit on the guaranty is premature,” Lurie told the outlet. “The lender knows that. They’re just trying to put pressure on us in the foreclosure case.”
Calls to Wells Fargo went unreturned, TRD said.
601W is far from the only aging office property facing foreclosure in the city’s CBD. Over the past few weeks, Deutsche Bank filed a foreclosure lawsuit on owners of 401 South State St., alleging it defaulted on its $47.8M loan on the office property once home to Robert Morris University. Meanwhile, building owner Marc Realty is being sued for failure to pay on a $16.5M commercial mortgage-backed securities loan at 216 West Jackson St.
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