Home Foreclosure After signing Medallion debt deal, company says Cabbie Union twisted arm in new suit

After signing Medallion debt deal, company says Cabbie Union twisted arm in new suit

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A federal lawsuit has disrupted the fragile peace over a debt relief deal for hundreds of cash-strapped taxi medallion owners, months after Senate Majority Leader Chuck Schumer brokered the pact between the city, a group of taxi drivers and a recalcitrant moneylender.

O’Brien-Staley Partners/OSK, whose investments in the taxi industry include loans for the expensive metal badges that allow yellow cab drivers to pick up hail from the street, accused the New York Taxi Workers Alliance of “seek to compel” the company to restructure its entire loan portfolio — even in cases where borrowers are paying or have a proven ability to pay.

“Once NYTWA began advising companies in good standing to strategically default on their loans, everyone felt that it crossed a line from public defense to tort interference,” said Jerry O. ‘Brien, CEO of O’Brien-Staley Partners, in a statement. Towards the city. “Rather than argue in the press, we asked a judge to order NYTWA to stop – just to stop.”

The suit accuses the taxi workers’ alliance of relying on ‘uncompromising activism’ and ‘relentless militant action’ to disrupt the Minnesota-based company’s payment plans with individual borrowers whose already fragile finances were slammed by the onset of the pandemic in 2020, when the number of taxi rides have dropped when the city was largely closed.

“‘Uncompromising activism’ and ‘nonstop activism’ are not tools to disrupt legal transactions,” OSK said in the lawsuit filed June 2, according to court records.

“Long before the city announced its own debt relief initiative, [OSK] worked with individual owner-drivers to facilitate payment based on the unique circumstances of each borrower,” the company’s attorneys wrote in the lawsuit originally filed May 24 in federal court in Manhattan, but moved to Brooklyn the week last.

“Crush the Debt”

The executive director of the taxi workers’ alliance said the lawsuit was a backlash against drivers who lobbied for debt relief.

“This baseless lawsuit is an attempt to retaliate against the drivers and their organization for fighting – and winning – debt relief that led to suicides and abject poverty,” said TWA’s Bhairavi Desai at THE CITY. “We will continue to fight for our members with all our vigor and strength.

“All drivers deserve a life without this crippling debt.”

The lawsuit, which seeks at least $774,046 in damages, is the latest twist in a long battle between the OSK and the 25,000-member organization, which represents drivers of yellow taxis and green and black cars .

A taxi driver asks the town hall to do more to help relieve the medallion’s debt, October 20, 2021.

The OSK argues that the taxi workers’ alliance ‘has no collective bargaining power’ and seeks to prevent it ‘from encouraging, advising or inducing borrowers to strategically default on the terms of their contracts “.

Desai called the costume “meritless”.

In March, OSK accepted an invitation from Schumer to participate in a Taxi and Limousine Commission debt relief program designed to cap debt service payments at $1,122 per month, with the city guaranteeing the restructured loan.

The previous deal followed months of protests – and a two-week hunger strike at City Hall by medallion owners – until the city and the taxi workers’ alliance agreed in November of a debt restructuring agreement with Marblegate Asset Management, the largest holder of taxi medallion loans.

But O’Brien-Staley Partners/OSK stayed away from that pact until the spring, saying at the time that it would participate in the program once it was up and running. The company has also pledged to end private sales of repossessed medallions and stop seizures on medallions held by owners who keep their loans in good standing.

Lose ground

A February article in THE CITY – to which Schumer credits bringing to light the plight of locket owners facing seizure – revealed that 250 lockets had been seized in the first three months after the company’s restructuring plan was agreed. November debt, including

94 in January alone.

CCM data shows that there have been 281 seizures this year, including 31 last month.

Medallions that once cost more than $1 million have for nearly a decade seen their value plummet to a fraction of that due to the rise of app-based ride-hailing companies like Uber and Lyft.

In court documents, the OSK says that at the start of the pandemic, it temporarily implemented six-month payment plans for “individual drivers with documented financial hardship,” initially charging them $100 per week in March 2020, a figure that, starting June 1, up to $350 per week.

The firm says it had nothing with the city’s March 2022 restructuring deal with Marblegate Asset Management.

“As of today, the program is unfunded, not fully documented and not operational,” the lawsuit states.

The Taxi and Limousine Commission told THE CITY the program has so far secured $50 million in debt forgiveness and is finalizing the secured portion of the loan.