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Prominent Manhattan real estate developer Harry Macklowe is in default on millions of dollars in debt, and faces lawsuits from lenders that could threaten his empire.
Last month, three banks filed a lawsuit in New York State Supreme Court charging Mr. Macklowe has defaulted on $13.5 million in promissory notes, partially secured by his flagship office building, Metropolitan Tower. The developer has allegedly defaulted on a more than $100 million mortgage on Hotel Macklowe, and one source says that lender Chemical Bank is considering foreclosing on the property.
Robert T. Loos, a partner at Fulbright & Jaworski representing the three banks that have filed suit, says that Mr. Macklowe and those banks are "engaged in negotiations but to date no final settlement has been reached."
Mr. Macklowe and officials in his company, the Macklowe Organization, decline comment. In a newspaper interview last year, Mr. Macklowe denied reports that he was quietly trying to sell property to raise cash.
Mr. Macklowe is the latest in a long line of New York developers whose financial problems have boiled over into the courts. The lawsuit filed against Mr. Macklowe suggests the real estate recession has yet to claim its last victim.
The extent of Mr. Macklowe's financial difficulties is unclear. But he faces at least one other significant lawsuit and one of his office buildings is virtually empty.
If Mr. Macklowe and the banks are unable to negotiate a settlement, the lenders could proceed with foreclosure actions against the property he put up as collateral. But since he is...