NY Supreme Court limits Monroe Capital’s maximum recovery amount to $4.9 million — a 90% reduction from its initial claim.

Cole Schotz obtained a significant ruling in the New York Supreme Court, Commercial Division, substantially narrowing a lender’s claims against the guarantors of a mezzanine loan from $48.75 million to $4.9 million. The loan was guaranteed by Maltese Diplomat 100 Mezz LLC, a joint venture between BH3 Management and PPG Development. The financing was originated by Monroe Capital for the conversion of South Florida’s Slate Hallandale Beach into The Mondrian luxury condominium.

In this case, the lender submitted a $75 million credit bid at a UCC Article 9 sale before pursuing an additional $48.75 million against the guarantors under a payment guaranty, taking the position that its credit bid did not reduce the guaranteed obligations. Cole Schotz challenged the lender’s position, asserting that its attempt to recover the guaranteed principal without accounting for the credit bid constituted an impermissible double recovery.

On October 27, 2026, the Commercial Division of the New York Supreme Court agreed with the core of that position, crediting the lender’s $75 million credit bid as a full offset against the guaranteed obligations. After applying that offset, the court limited the lender’s recovery on its principal claim to no more than $4.9 million — down from the $48.75 million the lender sought — leaving open only whether even that residual amount remains owed. The court also dismissed a separate attorneys’ fees claim as duplicative and denied the lender’s cross-motion for summary judgment.

The ruling represents a significant reduction in the clients’ potential financial exposure in the ongoing litigation.

The Cole Schotz litigation team included Michael Yellin, Rab Nalavala, Michael Klauder, Yasaman Mahdi and Suhailah Sallie.

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