Judge Blocks Taxi King's Abandonment of Cabs in Lender Dispute
August 24 2016 - 3:41PM
Dow Jones News
By Katy Stech
A bankruptcy judge blocked New York taxi mogul Evgeny "Gene"
Freidman from abandoning 46 taxis outside of the Citigroup tower in
Queens after he threatened a very public surrender to the lender he
has battled since 2014.
Bankruptcy Judge Carla Craig Wednesday told Mr. Freidman and his
lawyers, who agreed to surrender the vehicles and their medallions
in a dispute over a $34 million unpaid loan, to keep the property
safe until further notice.
Earlier this week, Mr. Freidman said he couldn't refinance his
debt to Citibank NA and agreed to surrender the medallions, which
give drivers of each vehicle the power to pick up street hails in
Manhattan's lucrative central business district.
The agreed surrender marks a turning point for Mr. Freidman, who
put dozens of his taxi companies in bankruptcy on July 22, 2015, to
keep Citibank officials from taking possession of the 46 taxi
medallions issued by the New York City Taxi and Limousine
Commission and owed by his companies.
Mr. Freidman and his lawyers didn't respond to emails requesting
comment.
Citibank officials said Mr. Freidman's companies missed a
monthly loan payment on Dec. 1, 2014. Mr. Freidman's lawyers said
the failure to pay was a bank error and said that Citibank
officials betrayed him to try to win business from Uber
Technologies Inc., the car-hailing service that has led some taxi
companies across the country to struggle.
Several traditional taxi companies, including those in major
cities like San Francisco and Chicago, have filed for bankruptcy as
customers turn to newer ride-hailing services. Chicago's Yellow Cab
taxi service, for example, blamed its financial woes partly on
pressure from "on-demand app-based private transportation
networks," bankruptcy-court papers show.
But Mr. Freidman has remained optimistic that traditional taxi
companies will continue to profit, as shown in a court papers filed
in March when he filed a proposal to pay Citibank's loans with
interest over the span of five years.
"The [taxi companies controlled by Mr. Freidman] are confident
that the market will rebound and correct and that the medallions
will continue to hold their historic value," his lawyers said in
the repayment proposal.
Judge Craig later rejected the repayment plan.
Amid the dispute, Mr. Freidman's companies agreed to make
$159,000 monthly payments, which he failed to do in June, July and
August, according to documents filed in U.S. Bankruptcy Court in
Brooklyn, N.Y.
The embattled Mr. Freidman has become the public face of
opposition to emerging players in the for-hire vehicle industry. A
native of Russia, Mr. Freidman took over his father's modest taxi
business in the mid-1990s to grow it into one of the New York
City's largest taxi fleets, with a total of 1,800 taxis
nationally.
Write to Katy Stech at katherine.stech@wsj.com
(END) Dow Jones Newswires
August 24, 2016 16:26 ET (20:26 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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