T
he financial woes of Joe and Meyer Chetrit continue to mount. A lawsuit filed by Mack Real Estate Group alleges that the brothers defaulted on a $31.5 million mezzanine loan for their 570-room Hotel Carter near Times Square. The loan, which matured on August 1, was part of a refinancing deal in August 2022 where Mack provided additional debt on top of a $120.5 million first mortgage.

    The Chetrits had purchased the hotel in 2015 for approximately $192 million and were reportedly in need of another $125 million in renovations. However, they soon fell behind on debt service payments by December 2022, according to the lawsuit. The brothers had provided a personal guarantee of $6.5 million for the loan, which included an agreement to "no defense of any kind or nature" that could absolve their obligations.

    Mack is now seeking a $6.5 million judgment plus interest at 9 percent until the guarantee is paid. This latest lawsuit adds to the Chetrit Group's growing list of setbacks, including a separate lawsuit filed by Mack against Meyer Chetrit for an $18.5 million guarantee on a stalled Hudson Yards hotel project. Additionally, Madison Realty Capital has scheduled a UCC foreclosure auction for the Chetrits' 1,300-unit Two Bridges development site at 265-275 Cherry Street.