Bankrupt
Real estate mogul Charles Cohen, with a substantial net worth, is facing a fierce legal battle with Fortress Investment Group over a $535 million defaulted loan. Pexels

Real estate mogul Charles Cohen stands to lose his prized possessions—including luxury yachts, Ferrari collection, and priceless artwork—as creditors circle his crumbling $2 billion (£1.48 billion) empire.

From towering skylines to the silver screen, Cohen built an impressive empire. Yet, reports suggest that the real estate magnate's vast fortune could be in jeopardy, and he is gearing up to sell properties to repay outstanding loans stemming from unsuccessful real estate transactions.

Fortress Investment Group is suing Cohen over a $535 million (£397.16 million) loan provided to his property firm, Cohen Realty Enterprises, in 2022. The court records from the New York State Supreme Court indicate that the collateral for this loan included a Manhattan office tower, the Le Méridien Dania Beach hotel in Fort Lauderdale, Florida, and four other properties.

Substantial Net Worth and Loan Guarantees

However, Cohen, with a net worth approaching $2 billion (£1.48 billion), also personally guaranteed $187.2 million (£138.97 million) of that loan, as earlier reported by the Wall Street Journal. This allowed Fortress, an investment giant partly owned by Abu Dhabi government fund Mubadala Capital, to pursue him personally when his company defaulted last year.

Pursuing Personal Assets

Fortress gained control of most of his collateral, but stated the value remains less than what Cohen owes. As a result, the firm has initiated legal action to seize Cohen's large mansions in the Provence region of France and Greenwich, Connecticut, according to New York court records.

Fortress has also targeted Cohen's 25 luxury vehicles, including two Ferraris, and a 220-foot yacht valued at nearly $50 million (£37.12 million), which authorities blocked from leaving an Italian port earlier this month. The firm has already taken hundreds of thousands of dollars worth of art, decor, and fine wines from Château de Chausse – Cohen's 138-acre home and vineyard in Provence.

Cohen's Marriages and Children

According to Fortress, Cohen is restricting the firm's ability to enforce the guarantees by transferring asset ownership to his family, according to court records. These records show that the real estate mogul transferred ownership of the yacht, currently moored in the Port of Loano, to his wife's name last year.

Cohen countered that these transfers were for estate and tax-planning purposes. A French court subsequently ruled in his favour regarding the Provence château.

Cohen has been married twice and has four children from these unions. According to a report by Good Returns, he divorced his first wife, with whom he shares a daughter and a son; both currently work at Cohen Brothers Realty Corp. In 2004, he married his second wife, Clodagh' Clo' Margaret Jacobs, and they have two children together. Cohen splits his time between residences in Manhattan and suburban Connecticut.

The Ongoing Battle with Fortress

While navigating his family life, Cohen also faces an aggressive legal challenge. 'They [Fortress] keep pecking at us, like a bird would peck at something. Enough was never enough,' Cohen said during a February deposition. In response, Cohen's firm has launched a countersuit against Fortress.

The billionaire stated he has used personal guarantees previously without encountering such difficulties. His legal team has contended that Fortress's actions – including placing restrictions on Cohen's brokerage accounts, as well as those belonging to his mother and sister – constitute harassment.

Financial Controls and Past Dealings

Currently, Cohen is unable to withdraw funds from his accounts without Fortress's approval. Fortress, in turn, has asserted that it issued subpoenas to Cohen's family members due to his alleged transfer of personal assets to them.

'Fortress is left with no choice but to begin enforcing its judgment against Cohen's assets,' the firm stated, as per court records, citing a duty to its investors. The collaboration between Fortress and Cohen was not new; the investment giant had previously financed many of Cohen's real estate deals in the years leading up to the pandemic.

The case highlights how even billionaire property empires can unravel when overleveraged deals turn sour in challenging market conditions.