On Eve of Chanukah Shliach Resolves Foreclosure Dispute

When Jews at Congregation Chabad-Lubavitch west of Boynton Beach began their Hanukkah celebrations Wednesday, they were reveling in a miracle that might seem to some as wondrous as a candle that burned for eight days.

On Tuesday, the day before Hanukkah, the Chabad resolved a dispute with its lender regarding an overdue $3.8 million loan.

The resolution will allow the Orthodox Jewish congregation to emerge from Chapter 11 bankruptcy, an unusual step that it took to protect the Chabad property from foreclosure by the bank.

“We are joyfully grateful that all of this will be put behind us,” Rabbi Sholom Ciment said in a written statement.
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The settlement caps months of tension for Chabad members, who were at risk of losing temple property, including their Torahs, which were pledged to the bank as collateral for the loan.

Ciment praised the congregation for rallying to help pay off a large portion of the loan by a Nov. 30 deadline. Ciment said the congregation convened Nov. 14 and raised “hundreds of thousands of dollars” in just one night. More than 300 people attended, and 98 percent of them gave, he said, including one woman who tearfully contributed all she had to give — $5.

“Hanukkah celebrates finding pure oil, enabling the miraculous lighting of The Temple’s Menorah,” Ciment said. “We too have found genuine pure oil — the eternal flame of Judaism — alive and brilliantly afire inside the hearts of so many.”

The bad blood between the congregation and the Fort Lauderdale-based Stonegate has its roots in a 2007 loan. That $3.8 million loan was made for a planned expansion of Chabad’s campus at 10655 El Clair Ranch Road. The growing congregation, now with 600 families, had plans to build additional facilities on a vacant parcel next door. But the expansion never took place.

In a September 2009 lawsuit, the Chabad accused the bank of engaging in a “bait-and-switch” that it says doomed the expansion. The Chabad alleged the bank didn’t make good on promises to provide additional financing in the form of a bond that would have paid off the 18-month loan and financed construction of the new buildings.

Stonegate fired back in October 2009 with a foreclosure lawsuit. The Chabad then sought the Chapter 11 protection in June.

In September, the Post reported that the bank was making noises about seizing the Torahs to help satisfy the loan. Chabad officials also complained that the bank had filed court papers on Rosh Hashana, the Jewish New Year, in a bid to allow the bank foreclosure to go forward despite the Chapter 11 filing.

In the article, Stonegate President Dave Seleski was resolute in his intention to recover the bank’s loan for shareholders. “We just want to get paid,” he said. He also said he would be sensitive to concerns about the sacred artifacts. “We’re not going to go in there and burn them,” Seleski said.

Seleski did not return calls Wednesday.

Chabad attorney Phil Landau said settlement talks between the bank and the Chabad commenced soon after the publication of the article, which gained national attention.

The Tuesday settlement was accomplished with the cash payment of $1.2 million and a restructuring of the remainder of the loan into a 30-year mortgage, court records show. Landau said the settlement includes an $800,000 payment by a single benefactor, who will take possession of the vacant land and guard it for future Chabad expansion.

As part of the settlement, all religious artifacts, including the Torahs, were released by the bank, according to court documents.

Ciment said the saga has brought the congregation closer. Congregants also remain committed to paying off the loan in a campaign dubbed, “Burn the Mortgage.”

For the next week, however, the only thing burning will be the candles of the Menorah, shining a light for a congregation whose future only recently seemed so dark.