There’s family drama in Fulton Market.
Some fathers might be proud of their son for pulling off a $35 million property sale to one of the nation’s biggest builders, but Michael J. Lerner sued his son for this exact reason.
The MCZ Development boss tried to usurp the equity that his son, Michael N. Lerner, had in a deal he entered with Thad Wong and Mike Golden, the co-CEOs of @properties.
The younger Lerner and the two brokerage heads each had a third of the equity in the property at 420 North May Street, which was bought last month for $35 million by Miami-based developer Crescent Heights, which is planning to build a 52-story, 587-unit apartment tower on the site. Wong, Golden and the younger Lerner bought it for $15.3 million in 2018.
But when a $2.3 million loan the younger Lerner obtained from Wong and Golden in 2019 fell into the hands of a trust his father had an interest in, conflict ensued, illustrating the “antagonistic history” between the family members, Cook County court filings by the father and son show.
The elder Lerner, through a trust in his wife’s name, claimed that during the summer of 2022, he obtained the note tied to his son’s debt to Wong and Golden. They didn’t expect to be repaid by the younger Lerner until the sale to Crescent Heights was complete, according to the younger Lerner’s attorney, Mike Kozlowski and emails between attorneys for the parties filed as exhibits in the lawsuit.
Yet days after acquiring the interest in the note from Wong and Golden, the elder Lerner sued his son, alleging he had defaulted on the debt by failing to pay off $1.9 million of its balance by its maturity date last summer.
“Everybody knew it was going to get paid out of the closing, but dad couldn’t wait, so he sued his son,” Kozlowski said in an interview.
Attempts to reach the elder Lerner were unsuccessful, and Adam Rome, one of his attorneys, didn’t return requests for comment. Another attorney for the father’s trust said he was unable to speak about the matter, and Kozlowski said he wasn’t authorized to speak about other reasons the family relationship soured. Wong and Golden declined to comment other than to say through a spokesperson they were uninvolved in the disagreement.
The younger Lerner denied that his father’s acquisition of the loan documents gave him the right to take over the equity in the property. He claimed that Wong and Golden modified the original loan so that each Lerner was on the hook to repay half of the debt, and said the father’s trust would have to name the father himself as a defendant in the case, as well.
The younger Lerner also denied that he confessed to defaulting on the loan with his father’s trust, and said the loan documents his father relied on as evidence in his suit weren’t the actual operating agreements between the parties involved in the property and the debt.
Judge Daniel P. Duffy dismissed the elder Lerner’s complaint, finding that his evidence didn’t meet the bar to issue a judgment against his son over the loan, though the judge allowed the father to potentially re-file a new complaint in the future.
The father filed a second lawsuit last month arguing that the entire one-third of the proceeds from the $35 million sale his son’s entity was set to receive should instead be deposited into an account controlled by the elder Lerner’s trust. That complaint was settled out of court this month, and the terms are private, records show.
MCZ Development, who has listed the son as a principal in the past, has been active elsewhere in Chicago’s real estate market lately. Last month, the firm sold a North Side apartment complex to architect Pat FitzGerald for $54 million.
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