After years of legal sparring, Charles Cohen has paid off a debt to his chief courtroom antagonist, Fortress Investment Group. Last week, the billionaire landlord settled a $187 million personal guarantee, staving off receivership for a portfolio of his properties, including the Pacific Design Center in Los Angeles and the Decoration & Design Building in New York.
“Charles Cohen has always honored his personal obligations,” wrote David Lopéz, Cohen Brothers Realty’s general counsel, in a statement. “The pay-off of the outstanding balance of the Fortress judgment is consistent with Mr. Cohen’s integrity and confirms his character as an honorable businessman.”
According to a document filed in New York Supreme Court, the payment to Fortress will eventually include interest and legal fees. As part of the agreement, Fortress will drop the restraining notices and subpoenas it has levied against Cohen’s network of financial partners in relation to this lawsuit.
The resolution does not end Cohen’s legal battles with Fortress. According to a letter from the company’s attorneys filed in court, it intends to proceed with at least two additional cases against the landlord, including a lawsuit over alleged fraudulent transfers of his personal assets, and the pursuit of $28.3 million allegedly owed under a carry guaranty.
Nor is it the final word on the fate of the D&D Building. Last month, the mortgage underpinning Cohen’s ownership of the design center went into maturity default, and the loan was put into special servicing (Lopéz said at the time that the company was “actively working” with its lender to resolve the issue). According to a report for Morningstar Credit, as of late last year, the building was only 63 percent occupied, down from 83 percent in 2020.
However, last week’s colossal debt payment brings Cohen’s portfolio back from the brink of receivership and staves off the most serious threat to his control over the D&D and the PDC. The legal documents do not specify the source of the funds, but recent reporting in Bisnow and The Real Deal shows that Cohen has generated tens of millions in proceeds over the past year by selling several commercial buildings in Manhattan and the ground beneath two midtown properties.
Cohen’s trouble with Fortress originated in 2022, when he borrowed $533 million from the company and put up several properties as collateral, along with the personal guarantee. When his company began falling behind on payments, Fortress took legal action, forcing a Uniform Commercial Code auction (potentially the largest of its kind ever) that allowed it to scoop up the Design Center of the Americas in Dania Beach, Florida, in 2024.
Over the past year, Fortress has been focused on collecting the personal guarantee. The legal skirmish over the debt has seen the company force the temporary seizure of Cohen’s yacht in Italy and the pursuit of his art collection, fine wine and Ferraris. This March, a hard deadline emerged when a judge gave Cohen 45 days to repay the guarantee or face receivership. In April, he received an extension; in May, another. One day before the deadline of June 19, Cohen pulled a $187 million rabbit out of a hat and paid back the loan.
