Expatriate Owl

A politically-incorrect perspective that does not necessarily tow the party line, on various matters including but not limited to taxation, academia, government and religion.

Sunday, January 26, 2014

Rebbe, Incorporated

Following the Nazi holocaust in Europe, many of the insular religious Jewish groups transplanted themselves to America so that they could (A) live; and (B) maintain their insularity.  But the world has changed, and it is very difficult to remain insular when you are based in a large city such as New York.  For one thing, if you borrow significant sums of money, you are subject to all of the lender's remedies if you default on the loan.

One of these groups is the followers of the Siget (or Sighet) chassidic dynasty, which consists of somewhat in excess of 300 individuals living in the Borough Park section of Brooklyn (which would be, at a maximum of maximums, 50 households, and probably closer to 40).  The group became an entity under New York's Religious Corporation Law, and is legally known as the Congregation Atzei Chaim of Siget.

In 2008, the Congregation, with due permission of the Court, took out a 10-year $499,000 mortgage loan, secured by their existing synagogue building located at 1511 50th Street in Brooklyn.  But times got difficult, and they fell behind in the loan payments -- far enough behind for the lender to bring a mortgage foreclosure action.

Due to the time, difficulty, and expense involved in foreclosing real property, mortgage lenders will go to great lengths to find alternatives to foreclosure.  The foreclosure action was apparently filed in late 2012, which indicates that the default probably occurred relatively early on in the life of the 10-year loan.

Valley National Bank, the mortgage holder, having lined up all of the required papers, moved for foreclosure.  The Congregation opposed the foreclosure judgment, claiming that the Congregation's leader, Rabbi Jacob Teitelbaum, the Siget Rebbe, who resides in the mortgaged premises, was not properly served with the required notice of the foreclosure action, and Rabbie Teitelbaum was the true owner of the property.  [As mentioned in a recent post, I have no problem with making mortgage holders run the gauntlet before they can foreclose on mortgaged properties, but, once the gauntlet has been run, the foreclosure right has been duly established and should be expedited.  If lenders could not enforce collection of their loans, then nobody would lend money at reasonable rates, and no person or business would be able to have a home.].  The Rebbe said that the Congregation was just his nominee, apparently a ploy to benefit from the touted advantages of incorporation. 

Nothing doing, said Judge Demarest to the Rebbe!  The mortgage was a commercial mortgage and not a residential mortgage.  The mortgage document specifically indicates that the premises would not include residential properties.  Rabbi Teitelbaum was not a signatory to the mortgage or its note.  And (for both the individual rights activists on the right side of the political spectrum and the advocates for the homeless on the left side of the political spectrum), merely depriving the Congregation (which, according to the Rebbe, is one and the same as the Rebbe himself) of ownership of the property would not in and of itself dispossess the Rebbe of his living quarters.

[Zooming in on the Street View of Google Maps, (which is reproduced in the Brooklyn Daily Eagle article), one can see that the building has three mailboxes by the front door.  There also is a balcony upon which is set up a beach chair of the type used by residential households.  The photo accompanying the article in the New York Law Journal indicates that an additional story has been added to the building subsequent to the Google Maps photo.].

The advantages of incorporation are widely touted in the classrooms, in attorney's and accountant's offices, and on the streets.  But if you are a corporation, then you do not enjoy the benefits of being a natural person.  These range from the famous Miranda Rights of warning upon arrest, to the right to personal notice of a mortgage foreclosure on your property.

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