A rejected request for a commercial construction loan is at the center of a dispute between a New York real estate development firm and Bethpage Federal Credit Union.
Liberty Meadows of Hauppauge, N.Y., and its managing members, Demetrius A. Tsunis and Enrico Scarda, filed a suit May 2 in the New York Supreme Court in Suffolk County, alleging breach of contract, fraud and negligent misrepresentation regarding a rejected loan from Bethpage to finance townhouse condominiums for senior citizens.
In the suit, the plaintiffs alleged that Bethpage committed to making a condo development loan, but the funding was not approved by the credit union’s loan committee. Due to the rejection, the plaintiffs said they experienced financial losses because the project was put on hold for 15 months.
The plaintiffs said they are seeking $55 million from the credit union for their alleged losses.
Kirk Kordeleski, president/CEO of the $4.5 billion Bethpage, has said the suit is without merit and the credit union will fight it . After a comprehensive review, Bethpage made the decision not to move forward with approving the loan, he added.
Kordeleski said he was surprised to hear about the lawsuit filing since the credit union had been in ongoing talks with all the parties involved.
Referring to a May 2 article on the Long Island Business News website, Kordeleski disputed claims from the Liberty Meadows plaintiffs’ attorney, saying Bethpage may have been close to reaching its member business lending cap.
While Bethpage is at 65% of its MBL cap and the credit union will reach its limit over the next three years, Kordeleski said the limit did not have an impact on rejecting Liberty Meadows’ loan request.
Tsunis and Scarda claimed that Bethpage loaned them $4 million, which would be put toward buying the 18-acre site in 2010. The plaintiffs said the credit union would finance $15 million to cover the construction costs of the condos. The amount was later reduced to $10 million, they further claimed. However, Bethpage did not fund the loan after more than a year of meetings, according to the plaintiffs.
Tsunis said he and his partner were eventually able to get a $4 million acquisition loan with Valley National Bank. That loan has since been paid off, he added.