Chabad Brooklyn Children's Museum Sued Over Millions In Allegedly Defaulted Loans

Tzivos HaShem and the Jewish Children's Museum are being sued by the Marty and Dorothy Silverman Foundation over $3.1 million in allegedly defaulted loans and $385,000 in interest.

Tzivos HaShem and the Jewish Children's Museum are being sued by the Marty and Dorothy Silverman Foundation over $3.1 million in allegedly defaulted loans and $385,000 in interest.

Here's an affidavit (as a PDF file) in support of the plaintiff's motion for summary judgement in the case filed by Lorin Silverman in January:

Download Silverman Foundation v Tzivos Hashem and Jewish Childrens Museum 1-2014

[Hat Tip: Context.]

Comments

[rocky]

Did anyone actually do anything wrong in this case, or was it a matter of cost overruns. What were Lorin Silverman's special qualifications to run this kind of lending/non-profit organization? What were the qualifications of the person or persons who approved the loan?

[Shmarya Rosenberg]

"Qualifications"?

WTF is wrong with you? Do you think there is some legal requirement that a charitable lender have special qualifications? What planet did you fall off of?

[jancsibacsi]

rocky---You got rocks in youre head.

[WoolSilkCotton; I must be seen to be believed]

You don't need qualifications to be screwed by frumma. If you have money, the frumma are willing to take it.

[rebitzman - $101 to read my posts]

I am a tad curious as to why the loan was made as well. The Marty and Dorothy Silverman Foundation is extraordinarily well funded and does great work (generally in the area if medical research). They are sitting on over a quarter billion dollars worth of assets that they absolutely should be trying to grow. However, I am not sure why the trustees would have considered this investment to be worth the risk. Granted, most of us here do not hold Chabad in high esteem, but I wouldn't loan these guys a dollar - much less $3 million.

All that said - the loan was made, it is in default and the relative wisdom (or lack thereof) of the loan does not alter that fact OR the recourse available. To be that far in arrears interest wise they would have to be at least 2 years behind.

[BeenThereDoneThat]

Interesting?

I did not know that jews could charge other jews interest on a loan.

Is there a loophole in the halacha?

[Jeff]

I don't understand. Can't they just ask the Rebbe to fix it?

[put a square into a hole]

To Jeff
Ever since they made the building without the Tzivios Hashem emblem, they angered many Chabad donors and were on there own after that.
The Rebbe won't help them..

[rocky]

Lorin Silverman, the plaintiff in the case, sits on the board of both FJC and the Silverman Foundation (see their web sites). FJC solicits funds from the public for its donor advised funds business (see its web site). Why is it unreasonable to question this loan? I wonder what the donors to FJC's funds think?

[David]

According to the Chabad way of doing things there is no business plan or other forward planning. If there is trouble, The Rebbe, G-d or a rich benefactor will sort it out. Failing that they will pressure the loan institution to cancel the debt with not so subtle hints that if they don't they will be considered antisemitic etc..

[Allan]

Too bad somebody didn’t sue the architectural firm that designed this monstrosity. What an eye sore ! It looks about as welcoming as a fortress or a giant stainless steel refrigerator.

Just compare to the façade of the Brooklyn Museum down the street - which is of course, like all the real museums in the city, strictly off limits to the Jewish children of Crown Heights because of the mortal danger such institutions pose to their holy souls.

[Frummie Where?]

Can somebody explain to me why a foundation is making money on a loan to a non-profit organization?

[Account Deleted]

Meanwhile, in other news, remember the guy with the big yarmulka who won the bidding on a $70 million diamond at Sotheby's? Turns out he has defaulted on the payment and they took the diamond back. I just don't understand why people have to put religious Jews in the spotlight like that if this is the result? Better let his agent or someone not so obviously religious stand up there at the auction so that it doesn't blow up in his face and give all of us an even worse name than we have now. Really sickening.

[rebitzman - $101 to read my posts]

"Why is it unreasonable to question this loan? "

As long as you separate the issue of granting it with the issue of paying it........not unreasonable at all.

Do I think this was a stupid loan that never should have been made? Yes.

Do I think the loan in is arrears and that the legal move was the only way they were going to recoup any of their money? Yes

Do I think Chabad ever intended too pay back the loan? No.

The issue I have with your approach is that you seem to be overlooking (to the point if forgiving) The fact that Chabad did in fact borrow the money - and are making no effort to pay it back,

[rocky]

rebitzman | March 03, 2014 at 07:26 AM

I am not forgiving Chabad. If I had been the credit analyst on the loan, I probably would not have recommended it. We don't know why the lenders made the loan but maybe more details will come out at the trial and SR will report them on this web site. Among the many things I did before I retired was credit analysis and I was very good at it.