Judgement pay means death for NYC small businesses

THE CITY

It’s been six months since Gov. Andrew Cuomo signed a law barring the practice of making small businesses sign away legal rights in exchange for high-interest, high-risk cash advances.

But that change doesn’t apply to New Yorkers.

The so-called confessions of judgment are illegal — but only for lenders located out of state. The law, passed after a Bloomberg News expose, was aimed at ending a flood of nonpayment cases clogging county courts.

A review by THE CITY of state court records found that small businesses in New York are continuing to sign papers with in-state lenders that leave them defenseless if they struggle to make payments amid interest rates hitting as high as 200%.

The court records show confessions of judgment being used to collect debts from everything from local restaurants to nail salons to a nightclub to an accounting firm, among other small businesses. Cab drivers who borrowed to buy their own taxi medallions have been hit hard by the judgments, too, as highlighted in a New York Times series.

On Feb. 11, a Midtown food hall outpost of the Chinese street food mini-chain Mr. Bing and its owner, Brian Goldberg, were sued in state Supreme Court by Lower Manhattan-based Capital Advance Services after accepting a $25,000 cash advance less than a month earlier, court records show.

To take the money — at a 25% interest rate — Goldberg signed a confession of judgment, a statement that admitted failure to honor the debt. That meant if he could not make his daily payments of $465.63, the lender had the right to collect the advanced sum in full.

Capital Advance Services is demanding $30,731 plus interest.

“We’re trying our best to deal with it. I can’t say anything more,” Goldberg told THE CITY when reached by phone.

Capital Advance Services did not respond to a request for comment.

Goldberg’s legal battle follows the shuttering of another Manhattan foodie magnet, City Bakery, just days after a cash advance company obtained a judgment against its owner — who also signed away his right to defend himself in court.

“The biggest loser, unfortunately, in this legislation are New Yorkers,” said Shane Heskin, an attorney who works with small-business borrowers ensnared by high-interest cash advances.

Brand new costs have appeared in Kew Gardens borough tower prison

 

Queens Chronicle

 
The cost of building a new jail in Kew Gardens could zoom past initial estimates of $2 billion, it was revealed last week.

Already unpopular in the neighborhoods surrounding the proposed site, the 19-story jail is to be funded by municipal bonds whose interest costs were not figured into the projected $2 billion price, civic leaders said after emerging for their first meeting with city officials since the plan was approved by the City Council last November.

“We are not happy campers,” said Sylvia Hack of Community Board 9, who has led the two-year fight to stop the jail from being built.

Hack, CB 9 Chairman Kenichi Wilson, Councilwoman Karen Koslowitz (D-Forest Hills) and Kew Gardens Civic Association President Dominick Pistone were among about a dozen local leaders summoned to a meeting Jan. 16 of a newly formed Queens Advisory Committee in an office building across the street from Borough Hall.

“This is a big deal,” said Wilson, whose board voted unanimously last year to reject the proposal.

“We’re just spinning our wheels trying to get answers,” said Hack.