American Dream sued for $389 million by lenders who helped bankroll mall's construction
Two lenders who helped finance construction of the American Dream megamall in the Meadowlands have sued the owners of the retail and entertainment center for $389 million, alleging a breach of their contract.
The lawsuit was filed in New York State Supreme Court last week on behalf of California-based SOL-MM III LLC, according to a court document. The California-based plaintiff is an administrator representing two firms, Western Asset Management and Nonghyup Bank of South Korea, which provided part of the $1.7 billion in loans that financed the sprawling project's construction, according to Bloomberg Law, which first reported the suit.
American Dream spokesperson Jessica Griffin declined to comment on Monday, and the lenders' attorneys at the New York-based firm Wollmuth, Maher & Deutsch didn't respond to messages.
According to a report Friday in The Bond Buyer newspaper, senior lenders on the $1.7 billion in debt granted American Dream a four-year extension for repayment in November after the mall defaulted. The renegotiation "effectively cut out" the two creditors who filed suit in New York, the paper reported.
American Dream has faced its share of headaches and successes in recent months. The mall last week announced that high-end Asian-American grocery chain H Mart would finally hold its grand opening at the site this Friday, four years after it was first announced.
In the fall, analysts said the mall was showing signs of a rebound, as retail outlets in general began to emerge from the shadows of the COVID pandemic.
But there have also been repeated warning signs. The mall, owned by Canadian developer Triple Five, reported $60 million in losses in 2021 amid the pandemic, and it's embroiled in a dispute over $9 million in payments that neighboring municipalities say they are owed.
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On Feb. 1, a trustee representing another set of creditors said an $8.8 million interest payment had been missed on $290 million of taxpayer-backed bonds used to pay for construction.
Griffin, the American Dream spokesperson, said last week that the payment had been delayed because the New Jersey Economic Development Authority still hadn't completed a required review and certification process. It's the state's responsibility to ensure the payment is made, not American Dream's, she said.
“American Dream and its tenants, like all other businesses in the state, have been making sales tax payments, which are the source of revenue to make the grant payments," Griffin said in an email last week.
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.
Email: munozd@northjersey.com; Twitter: @danielmunoz100
This article originally appeared on NorthJersey.com: American Dream Meadowlands: Creditors sue mall for $389 million
