Billionaire Charles Cohen is reportedly scrambling to sell off his assets in an effort to pay back some challenging loans tied to troubled real estate ventures. He risks losing his prized wine collection, artwork, mansions, superyachts, and Ferraris.
Cohen, aged 73, is facing a lawsuit from Fortress Investment Group over a $535 million loan taken out in 2022 for his company, Cohen Realty Enterprises.
The loan was secured by collateral that includes the Le Meridien Endania Beach Hotel in Fort Lauderdale, Florida, along with four other properties, as noted in records from the New York Supreme Court.
Despite his impressive net worth of nearly $2 billion, Cohen personally guaranteed $187.2 million of that loan. Earlier reports have indicated that Fortress, partially owned by the Abu Dhabi Government Fund, has aggressively pursued Cohen following his company’s default last year.
Fortress has taken control of much of Cohen’s collateral but claims its worth still doesn’t meet the total debt owed. Court documents reveal that the company has initiated legal actions to seize luxury apartments owned by Cohen in both Provence, France, and Greenwich, Connecticut.
The investment firm also targeted 25 of Cohen’s luxury vehicles, including two Ferraris, as well as a 220-foot yacht valued at nearly $50 million, resulting in the yacht being detained in an Italian port earlier this month. Moreover, hundreds of thousands of dollars worth of art and fine wine have been seized from Cohen’s properties in Provence.
No comments have been made by Cohen’s attorney regarding the situation.
This situation isn’t unique; personal guarantees have previously caused turmoil for other prominent figures. Cohen himself is known for leading Donald Trump into financial difficulties in the 1990s.
Legal records indicate that Fortress claims Cohen has transferred ownership of some assets to family members, making it difficult for them to enforce their guarantees. For instance, he allegedly moved a yacht’s ownership to his wife’s name last year, which Cohen argues was for legitimate tax and planning reasons. A French court has sided with him in the case concerning the property in Provence.
Cohen described Fortress’s actions as aggressive during a deposition earlier this year, saying, “It wasn’t enough.” His company is contesting the claims made by Fortress.
He pointed out that he has utilized personal guarantees in the past without encountering issues like the current predicament.
His legal team contends that Fortress’s actions feel more like harassment, blocking access to his personal and family accounts.
Currently, Cohen cannot withdraw funds from his own accounts without approval from Fortress, which has reportedly involved his family in the proceedings as well.
Fortress claims they have no choice but to take action on Cohen’s assets to honor their commitments to investors.
This isn’t the first time the two have worked together; Fortress has financed numerous projects for Cohen over the years prior to the pandemic.
However, Cohen’s portfolio took a hit in 2020 as demand for office space and cinemas—big parts of his wealth—decreased sharply.
While other property owners returned their holdings to lenders, Cohen agreed to a restructuring plan with Fortress, including personal guarantees. However, the market continued to struggle, leading to multiple adjustments on their loans before Cohen’s business ultimately defaulted.
Cohen claims he had a handshake agreement for further expansion with Fortress, a claim the company disputes. Courts have ruled in favor of Fortress on this matter.
Now, Cohen is in a rush to sell his properties to generate cash to settle his debts with Fortress.
