First National in ownership tangle: N.Y. investors fight tenants to regain control

[begingri]

By Daniel Duggan

After two years of legal wrangling, the word "ownership" has become a relative term for the First National Building in downtown Detroit.

A defaulted loan, liens filed by construction companies, a court-appointed receiver and a bankruptcy by the legal entity that originally owned the building all have complicated the relatively simple question of who controls the building.

In 2009, a judge gave control of the building to a receiver, taking control away from New York investor Alex Dembitzer and his mother, Jacqueline Fried. But through a New York bankruptcy court, the two are now trying to regain control of the building they bought in 2005.

And that's what the building's largest tenants, Honigman Miller Schwartz and Cohn LLP and the United Way for Southeastern Michigan, don't want. The two tenants are fighting in court to prevent moves to restore the New York investors' control of the building -- a possibility in the bankruptcy case.

"These motions seek to put the fox back in charge of the henhouse with no safeguards at all to prevent the building from the same gross mismanagement, neglect and abuse that led to the filing of this case in the first place," Honigman wrote in a legal brief.

The law firm has accused the building owners of mismanaging it to the point of making it impossible to do business. The firm reported floods in the building, people trapped in elevators and inconsistent heating and cooling.

Calls placed during the past two weeks to the New York office of Dembitzer and Fried's real estate company were not returned.

The story of the First National Building continues the saga of Dembitzer and Fried and their controversial ownership of Detroit buildings that started with the acquisition of the Cadillac Tower office building in 2003.

They acquired the First National and Penobscot buildings in 2005 and later the Alden Park and Lafayette Park residential complexes. The group operated under the umbrella company name the Northern Group, but each building is owned by a specific limited liability company, such as FN Building LLC for the First National.

By the middle of 2008, the Northern Group stopped making mortgage payments on all but the Lafayette Tower. It also stopped paying some local contractors for work done on the buildings.




Continued at: http://www.crainsdetroit.com/article...ght-tenants-to

[DetroiterOnTheWestCoast]

I hope this all gets sorted out. I had two different jobs in the First National in the early 1980's, one of which was as a paralegal with Honigman. I absolutely hated that job because the attorney I worked for was a nasty witch. Or should that have started with a B?

The other job there was much better. Anyway, I loved the building.

[Richard]

Kinda like the guy in Texas who had some large truck stops,during the peak he pulled a 25 million loan on them. 3 years later he declared bankruptcy opened a shell corporation and bought everything back for 5 million free and clear.Lots of large land owners playing the debt reduction game.

[iheartthed]

Are we allowed to post full articles here?

[Danny]

Somebody is getting any piece of real estate from National City Bank Building, Alden Park and LaFayette Park Apts. and its not by individuals from you and me. Corporate origarchies are getting the stronghold of any property in their choosing even your home. Who is losing out? the proletariats. Welcome to the Origarchical Republic of the United States of America. Where the plutocrats are the senators, judges, representatives, house, Armed Forces. The Presidents of the O.R.U.S.A. is the some CEO from a corporate bank from New York.

WORD FROM THE STREET PROPHET

I hope Donald Trump don't run for President.

Neda, I miss you so.

[stasu1213]

Mother and son screw up. . They were plans on building some condo/movie/retail complex on Monroe St. It didn't fell through. I would if the Kilpatrick administration was responsible for these dynamic duo to purchase these building in Detroit. My friend had told me that last spring the tenants in Lafayette Towers were going to put there rent into an escrow account. A meeting were held and Northern Group had sent Glynn Plummer, who was running for Congress, to talk the tenants out of it. That let my friend know that the Dembitzers have some local political clout.