Wells Fargo Sues to Foreclose on Standard High Line Hotel
(Bloomberg) -- Wells Fargo & Co. sued to seize and sell the Standard High Line Hotel in New York on behalf of its creditors, claiming the Hong Kong-based owner, Goodwin Gaw, has failed to make payments on a $170 million loan since May 2020.
Gaw, the chairman of Gaw Capital Partners, owes more than $186 million in principal, interest and fees on the 338-room hotel that straddles the elevated High Line park on Manhattan’s West Side, according to the complaint filed Nov. 1 in Manhattan federal court.
New York hotels have struggled after the Covid-19 pandemic forced them to shut down. Occupancy at the Standard was 30% as of December, climbing to 76% in June, according to commentary on the mortgage. The hotel is currently open as is its restaurant.
Gaw will “vigorously defend” against the foreclosure, the company said in an email. It said Apollo Global Management Inc., which owns a note that allows it to take control of the property in case of default, spurned settlement offers and payments to serve its own interests.
“Apollo Global Management and its affiliates, who own a small sliver -- 18% -- of the loan, have demonstrated that they are more interested in putting their financial greed above interests of all involved including the bondholders,” Gaw Capital spokesman Kai Speth said in an email.
Apollo disputed its role in causing the foreclosure.
“Apollo is not a party to the foreclosure action, which was initiated by the special servicer,” a spokesperson said in an email responding to questions. “The debtor in this case has failed to make payments under the loan and has been in default since May 2020.”
CWCapital Asset Management, the special servicer assigned to manage the mortgage after it went into default, declined to comment.
CWCapital filed a formal notice of default in June of 2020. A year later, CWCapital wrote to Gaw that due to the default it was accelerating on the debt, so the entire unpaid balance including accrued interest had become due and payable.
Gaw Capital Partners had $32.5 billion under management as of mid-2021, according to the company’s website. Even as it fell behind on the New York hotel payments, Gaw has continued to seek new investments, including a reported $437 million last month for a 20-floor tower in Singapore.
The case is Wells Fargo Bank, NA v GC SHL, 21-cv-08940 U.S. District Court, Southern District of New York (Manhattan).
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