The problems keep piling up for Joe and Meyer Chetrit.
The brothers have defaulted on a $31.5 million mezzanine loan that Mack Real Estate Group provided for their 570-room Hotel Carter near Times Square, according to a lawsuit filed by the lender.
Mack is suing to collect a $6.5 million personal guarantee Joe and Meyer provided for the loan, which went into default when they failed to pay it off at its August 1 maturity date.
A representative for the Chetrit Group could not be immediately reached for comment, and a spokesperson for Mack declined comment.
Mack provided the mezzanine debt on top of a $120.5 million first mortgage in August 2022 when the Chetrits refinanced the hotel at 250 West 43rd Street. The brothers paid about $192 million in 2015 to buy the hotel, which reportedly needed another $125 million in renovations and upgrades.
Trip Advisor once named it the dirtiest hotel in the city, and the Observer wrote it was “undeniably, unequivocally, the worst hotel” in the Big Apple.
It was not long after the Mack loan that the Chetrits ran into trouble. By December of 2022, they fell behind on debt service payments, according to the lawsuit Mack filed Friday.
In their payment guarantee, Joe and Meyer agreed to “no defense of any kind or nature” that could absolve their obligations, the lawsuit claims.
“Defendants have made no payments to satisfy their clear payment obligations under the payment guarantee,” it said.
On top of the $6.5 million judgment, Mack is asking for interest of 9 percent until the guarantee is paid.
The lawsuit is just the latest setback for the Chetrit Group.
Earlier this month, Mack filed a lawsuit against Meyer Chetrit claiming he owes an $18.5 million guarantee on a mezzanine loan for a stalled Hudson Yards hotel project at 545 West 37th Street.
And Madison Realty Capital recently scheduled a UCC foreclosure auction for the Chetrits’ 1,300-unit Two Bridges development site at 265-275 Cherry Street.
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