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VALERIE AND ANDREW Krieger have been named in a complaint filed by Wachovia Bank in Sullivan County Supreme Court claiming they missed two balloon payments totaling nearly $800,000 on properties in the Manor.
Wall Street woes visited on Manor?
By Ted Waddell
LIVINGSTON MANOR The ongoing financial crisis may be coming home to roost in this little town located on the famed Willowemoc Creek.
In recent years, Livingston Manor has been rocked by a series of floods, but residents battled back, and backed by financier Andrew Krieger (under the umbrella of the Livingston Manor Development Corporation, or LMDC) have undertaken efforts to revitalize Main Street, transforming it into a showplace in rural Sullivan County.
Krieger, echoing his profitable successes on Wall Street, quickly rose to prominence in the Manor, and though he got into trouble with officials in New Jersey (pleading guilty to criminal mischief and paying a $2.75 million fine in 2005 to settle allegations he illegally cleared Palisades Interstate Park land abutting his NJ home), many credit his efforts with initiating the current downtown viewscape.
But recent developments have cast a shadow over the town, causing local folks to wonder if the spectre of the Wall Street investment meltdown is going to affect one of the hamlet’s main developers and their community.
On December 4, 2008, Wachovia Bank, National Association (NA) filed a verified complaint before Sullivan County Court Judge Mark M. Meddaugh, citing LMDC and the Kriegers (Andrew and his wife Valerie) as defendants in an “Order Appointing Receiver in Mortgage Foreclosure Action” in two actions (Index Numbers 4277-08 and 4278-08), affecting four anchor buildings along Main Street, plus a vacant lot.
Index No. 4277-08 states the foreclosure action was started by Wachovia (acting as the plaintiff) on the property known as 43 Main Street (Medicap Pharmacy, plus two upstairs apartments). Wachovia claims the mortgages are in default for non-payment of $199,597.54 in principal, due August 1, 2008 and that while the rents are being paid, those rentals “are not being applied to the reduction of the charges against the mortgaged premises; and that the appointment of a receiver of the rents and profits of said premises is necessary for the protection of the plaintiff.”
Index No, 4278-08 refers to three buildings: #34 Main Street (Hamish & Henry Booksellers, including four apartments), #38 Main Street (Dr. Livingston’s Wines & Spirits) and #66 Main Street (adcStudio, which includes an apartment), plus a vacant lot on Old Route 17.
According to the order filed before the court requesting the appointment of a receiver, “mortgages are in default for the non-payment of the principal sum of $599,957.17,” again overdue since August 1, 2008.
In essence the foreclosure actions were initiated because Wachovia alleges that LMDC and the Kriegers have not made two balloon payments totaling $799,554.71.
On January 6, 2009, Monticello attorney Michael Davidoff accepted the court-appointed position as receiver of the rents and profits from the properties, the collected monies to be conveyed to the bank.
According to several renters, they have been paying rent monies to LMDC on a regular basis and showed copies of the checks as evidence.
Representatives of LMDC declined to comment, the Kriegers could not be reached in Dubai, United Arab Emirates, and calls to Deerhurst Management Corp. of Edgewater, NY were not returned. (Krieger is co-founder and CEO of Deerhurst, a money management firm specializing in foreign exchange trading.)
As the court-appointed receiver, Davidoff explained there were three options: he remains as receiver, the bank completes the foreclosure actions, or “the bank and landlord work out an agreement on the money due.”
On Friday, January 16, Michael Brennan, former chief of the Monticello Police Department, was observed serving legal papers on renters of four properties owned by the Kriegers. The papers specified that Davidoff would now be the receiver of the rental payments.
Chris Andreola, owner of adcStudio, is taking the whole thing in stride but exploring his options for the future.
“Now that it happened, it’s what does it mean and why? ... Did he [Krieger] forget to pay it, or is he going to pay it? And how is it going to affect the town?
“Everybody gets to come up with their own rumor and play a little parlor game,” added Andreola. “I’m hopeful it’s all going to work out.”
Everyone in the Manor is likely also holding their breath. The Kriegers own other properties along Main Street, and residents are questioning if the rest of the dominoes will fall.