Kent Swig’s Misuse of Loan Hangs Wife/Kids Out to Dry, Lawsuit Claims
Kent Swig’s alleged misuse of a home loan led his estranged wife Elizabeth to nearly lose their apartment to foreclosure, leaving her running to her famous daddy, real estate giant Harry Macklowe, for cash, The New York Daily News reported yesterday based on papers filed with the Manhattan Supreme Court.
Ms. Swig is seeking unspecified punitive damages in their divorce case, claiming that Mr. Swig’s misuse of the $12.5 million loan led to the near foreclosure of their $26 million apartment at 740 Park Avenue.
She argues that her husband convinced her that the $12.5 million loan would allow them to pay off an earlier $5 million loan and “tide them over through the bad market,” but instead he used the money to pay off business debts and then stopped paying off the loan in June 2009.
He allegedly stopped paying cash to support Elizabeth and their two kids as well, leaving her to turn to Mr. Macklowe and his wife for financial help (Mr. Swig was later ordered to pay them $7,000 per month), the News stated, citing the court papers.
Mr. Swig argued that his “alleged conduct, lying, deliberately misleading and tricking the wife into agreeing to encumber the family’s home with an additional $12.5 million of debt fails to meet the standard for punitive damages,” but Justice Ellen Gesmer added in an April decision that his “wanton dishonesty” was indeed enough for her to sue for punitive damages.
Ms. Swig’s lawyer called Mr. Swig’s conduct “appalling,” while Mr. Swig’s lawyer called the case “a typical ‘garden variety’ matrimonial dispute of ‘he said, she said,’” with “no evidence to support Ms. Swig’s false claims.”
Mr. Swig is also fighting a pending lawsuit from his estranged in-laws over his alleged failure to repay a $200,000 loan. But Mr. Swig has argued that Mr. Macklowe signed a promissory note on the loan that said he wouldn’t sue for repayment if it dipped Mr. Swig into bankruptcy.
“The Macklowes have treated Mr. Swig (their estranged son-in-law), and the Note, with flamboyant disregard and unadulterated spite,” stated an affidavit filed by Mr. Swig and his lawyer last year.
He also has accused Elizabeth and her parents of having forged his signature on insurance checks, which he says they may have used to repay themselves the loan, according to the News.
Among other holdings and titles, Mr. Swig, president of Swig Equities, is also a principal of Terra Holdings, which owns and operates the residential firms Brown Harris Stevens and Halstead Property.
Famously clattered about the face with an ice-bucket by a furious former partner, he’s known as a rising star of the boom era.