- Fortress Investment Group won approval to proceed with a $534M foreclosure auction against Charles Cohen, marking what could be the largest UCC foreclosure auction ever.
- The auction will include a wide range of assets from Cohen Brothers Realty, including movie theaters, a Midtown office building, and the Design Center of the Americas.
- The foreclosure follows disputes over the commercial reasonableness of Fortress’ auction plan, which was revised and approved for November 8th.
The legal battle over Fortress Investment Group’s $534M foreclosure against Charles Cohen has reignited, as reported in The Real Deal.
Foreclosure Background
A New York Supreme Court judge approved a November 8 auction date for Cohen Brothers Realty’s assets. This auction could become the largest UCC foreclosure in history.
The foreclosure stems from the $534M loan Cohen Brothers Realty allegedly defaulted on. Cohen disputed the claim, asserting that a restructuring agreement had been reached with Fortress in December.
However, the court rejected Cohen’s motion to cancel the auction entirely, allowing Fortress to move forward after revising its auction plan to meet the Uniform Commercial Code’s commercial reasonableness standard.
Assets at Stake
The auction will include a vast array of assets, such as:
- Design Center of the Americas
- Le Méridien hotel in Dania Beach, Florida
- A Westchester redevelopment site formerly known as Doral Arrowwood
- 50 movie theaters across the U.S. and U.K.
- Tower 57, a Midtown office building currently in default on its ground lease
Legal Disputes
Cohen’s legal team pushed for an auction date in early 2025, arguing that the November auction leaves insufficient time for bidders to assess the assets and secure financing.
Fortress countered, alleging that Cohen was trying to delay the process to accumulate more debt, which now totals $7M in interest per month. The judge ultimately sided with Fortress, allowing the auction to proceed.
What’s Next
The court will soon rule on whether Cohen will be liable for a $187M personal guaranty that Fortress sought to collect in March. The outcome of this case could have significant financial implications for both parties.
