Joel Schreiber Ordered to Pay Starwood, Goldman Sachs $100M

Months after sealing one of his biggest deals since becoming WeWork’s first investor more than a decade ago, Joel Schreiber finds himself on the wrong end of two judgments totaling nearly $100 million.

In separate lawsuits against the Brooklyn-based developer, two New York state judges ruled that Schreiber owes tens of millions to both Goldman Sachs and an affiliate of Barry Sternlicht’s Starwood Capital Group. One of the judges enjoined Schreiber from selling any more WeWork stock, which he had pledged as collateral to secure a loan from Goldman.

Schreiber and his investment firm, Waterbridge Capital, have been through a series of highs and lows in recent months. In December, he lost his marquee asset — the Broadway Trade Center in Downtown L.A. — to Starwood in a foreclosure sale. But in late March, Schreiber put together $110 million to buy another Downtown L.A. property, the 40-story Union Bank Plaza building, at a sharp discount.

Schreiber’s rise as a prominent real estate player on both coasts has been accompanied by numerous lawsuits from small-time investors, brokers and lenders. Despite being constantly embroiled in litigation, he has shown a remarkable ability to bounce back and get into bigger and bigger deals.

But the lawsuits brought by Goldman and the Starwood entity are different from Schreiber’s previous squabbles with local players in Brooklyn. Both plaintiffs are institutional investors suing for eight-figure amounts and appear to have no intention of settling.

Schreiber did not return a request for comment.

Trouble with Goldman

Goldman Sachs alleges that in 2019, Schreiber pledged a stake in WeWork — 1.56 million shares, worth more than $90 million at the time — to get a $20 million loan from the investment bank.

Goldman claims it later discovered that Schreiber had sold 300,000 of those shares, violating the loan agreement by depleting the underlying collateral. Goldman further alleges that Schreiber pledged essentially worthless interests in other companies as security for the loan. These included his stake in Retail Worx, a startup that had already gone out of business, according to PitchBook, which tracks venture capital.

Schreiber also put up the rights to the future profits from a company that held a stake in a three-story Upper West Side building. But he already appeared to be in default on the building’s senior loan from Signature Bank and would soon face foreclosure, according to a separate lawsuit.

Schreiber failed to repay the loan, forcing Goldman to sue in 2021. In court filings, Schreiber argued that Goldman incorrectly calculated the interest on the loan.

A New York state Court judge was not convinced, awarding Goldman $19.5 million, plus $2.6 million in interest, and barring Schreiber from selling any more of his WeWork stake.

“Given the defendants’ history in selling assets in violation of the governing documents, an injunction is appropriate,” said Judge Andrew Borrok.

A spokesperson for Goldman Sachs declined to comment.

Starwood’s suits

Schreiber’s Waterbridge Capital and Continental Equities’ Jack Jangana acquired Downtown L.A.’s vacant Broadway Trade Center in 2014 for $122 million. In 2018, Starwood affiliate provided a $213 million refinancing loan, which was later upped to $219 million.

Schreiber and Jangana both personally guaranteed the loan, claiming they had at least $6 million in liquid assets, according to loan documents. But around the same time, Schreiber claimed in a deposition in a separate lawsuit that he had liquidity problems and under $1 million in liquid assets.

At one point, the building was supposed to turn into a metaverse hub, according to local news reports. Another report said it was on the market for $425 million. Nothing happened.

The property, which required major upgrades, remained vacant. In 2020, Schreiber and Jangana defaulted on interest payments, real estate taxes and insurance premiums. And after a few extensions, Starwood moved to foreclose in May of last year.

Schreiber put the property into bankruptcy, claiming he had a deal to sell it to Capri Investment Group’s Quintin Primo, but the sale fell through after Primo missed multiple deadlines to put down a deposit.

Using a credit bid, Starwood acquired the property in a foreclosure sale for $200 million. Meanwhile, Starwood sued Schreiber, claiming he still owed $71 million on the loan and had violated the loan agreements by filing for bankruptcy. Starwood did not sue Jangana, who claimed that Schreiber put the property into bankruptcy without his permission.

Schreiber argued the property should have been worth far more than $200 million and that he was never properly served. But a judge ruled in favor of the Starwood entity, claiming that Schreiber owes $78.7 million.

His trouble with Starwood hasn’t ended there. The company is suing Schreiber for a separate $5.4 million loan on the Broadway Trade Center, seeking to get him to turnover his interests in certain entities, including Waterbridge Capital. Schreiber has not responded to that suit.