The New York Times reports on the "infamous" Broadway Bank:
In the second-floor room with the green walls, Lenny Charles Labanco pointed to where the news desk sat, and the television cameras once stood. Nearly 10 years ago, he started an organization called International News Net World Report, which from that room produced hundreds of 30-minute programs, which were broadcast on satellite television.
The programs never made much money, but survived in large part because the building where they were made, at 56 Walker Street in TriBeCa, was owned by a supporter who charged minimal rent for the use of the studio and the lower floors where Mr. Labanco and others organized readings, panel discussions and fund-raisers, often for left-leaning causes.
Now, though, Mr. Labanco has suspended the programs, and the future of the Walker Street building is in doubt. A loan agreement signed in 2007 by the building’s owner, Guy Morris, resulted in foreclosure proceedings, and the entity that owns the building, 56 Walker Street L.L.C., has declared bankruptcy.
The lenders, Broadway Bank and Wexford/HPC Mortgage Company, an affiliate of WexTrust Capital, did not provide all the money they had promised, Mr. Morris said. Eventually, WexTrust went into receivership, and two of its top executives pleaded guilty to federal fraud charges. Broadway Bank in Chicago subsequently was shut down under the supervision of the Federal Deposit Insurance Corporation. That agency then transferred the loan to a second bank, MB Financial, which has asked a federal bankruptcy judge in New York for permission to foreclose.
Guess who's back in business speaking of
Broadway Bank?:
The Giannoulias family, whose Broadway Bank collapsed in the white-hot spotlight of Alexi Giannoulias' Senate campaign two years ago and now is defending a federal lawsuit alleging shoddy lending practices, is making loans again from a separate bank in New York and bankrolling some of its old Broadway customers.
CheckSpring Bank, based in the Bronx and 90 percent owned by a Giannoulias family trust, is growing rapidly, thanks in part to the addition of commercial real estate loans in New York originally made by Chicago-based Broadway Bank and acquired later from the Chicago bank that assumed Broadway's assets. Demetris Giannoulias—former Broadway CEO and older brother of better-known Alexi, the former Illinois treasurer who lost to Mark Kirk for Senate in 2010—is chairman of CheckSpring's parent company, CheckSpring Community Corp.
There's more:
CheckSpring, a startup bank in 2007 when the Giannouliases bought it with more than $10 million in dividends they paid themselves from much larger Broadway Bank, last year assumed loans totaling $5 million to owners of two Brooklyn hotels, which previously were held by Broadway, according to mortgage documents filed in New York. They helped fuel a 60 percent increase in total loans to $48 million from $30 million at CheckSpring, which posted its first profit last year.
The deals were remarkable, banking industry experts say, given that Demetris Giannoulias is a principal defendant in the $104 million lawsuit filed March 7 in Chicago by the Federal Deposit Insurance Corp. in connection with Broadway's failure. Broadway's demise resulted in a $391 million projected loss to the FDIC's insurance fund. The lawsuit accuses Mr. Giannoulias and other officers and directors of “gross negligence” and “reckless” lending practices.
No word from Chicago Mobster
Michael "Jaws" Giorango on this one.
