Medallion lender halts lawsuit accusing taxi drivers’ union of sabotage

0

A federal lawsuit that marked the latest salvo in a long battle between taxi medallion owners and a Minnesota-based lender has died down in a hurry.

Court documents show financial firm O’Brien-Staley Partners/OSK ‘voluntarily dismissed’ its Monday lawsuit against the New York Taxi Workers Alliance days after the case was filed – and hours after THE CITY rendered case account.

The two sides have been at odds for months over City Hall’s debt relief plan for medallion owners, with the OSK filing a federal lawsuit on May 24 accusing the 25,000-member taxi union of ‘relentless militant action unchecked by the rules that govern everyone’ that threatened to disrupt the company’s payment plans with individual borrowers, according to legal documents

But in court documents filed Monday in Brooklyn, the company abruptly ended the case in which it was seeking at least $774,046 in damages and accused NYTWA of seeking “to compel [OSK] to restructure its entire loan portfolio as part of the [debt relief] program – even when the individual borrower is currently paying as agreed or has a proven ability to pay.

“We have filed a lawsuit demanding that NYTWA end its tortious interference,” Jerry O’Brien, CEO of O’Brien-Staley Partners, said in a statement to THE CITY. “It seems to us that NYTWA now understands that was wrong and has stopped.

“We have therefore dropped the lawsuit, but we can file a new case if it happens again.” The lawsuit was originally filed last month in federal court in Manhattan, but was moved to federal in Brooklyn on June 2.

O’Brien had previously said the taxi drivers’ union had “crossed the line between defending the public interest and tortious interference” and that a judge should tell the group to “stop, just stop”.

Despite the lawsuit being dropped, the NYTWA executive director said “the fight continues” for medallion owners who have been hit hard by competition from ride-sharing apps and the pandemic.

“It looks like OSK decided to ‘stop – just stop’ – with this baseless suit, that’s good,” Bhairavi Desai told THE CITY. “Now let’s end the lifelong poverty and debt facing hundreds of their borrowers – that’s what’s really at stake here.”

Again, again

In March, OSK had accepted an invitation from Senate Majority Leader Chuck Schumer (D-NY) to sign on with the Taxicab and Limousine Commission’s Deficient Loan Supplemental Guarantee Program, which helps owners struggling with payment difficulties. The company has also agreed that its servicers will not take back medallions from owners who keep their loans in good standing with weekly payment plans.

The program, which was spurred by the taxi drivers’ hunger strike at City Hall in October and November, is designed to cap debt service payments at $1,122 per month, with the city guaranteeing the restructured loans.

The OSK said in March it would participate in the loan program when it becomes operational, but in court documents it claimed it was “not fully funded, not fully documented and not operational”.

The Taxi and Limousine Commission said it had so far secured $50 million in debt forgiveness for nearly 300 medallion owners and was finalizing the loan guarantee portion of the plan, which would restructure the loans up to $200,000 each with a $30,000 grant from the city. .

Taxi drivers held a rally at City Hall to ask for help with deflated medallion values ​​on July 11, 2019.

“With the Medallion Relief Program, we are finally turning the tide on the taxi medallion debt crisis,” a TLC spokesperson said. “We continue to encourage all lenders to participate so that we can ensure that financially distressed medallion owners get real debt forgiveness.”

When Schumer brokered peace between the two sides, he credited THE CITY reports in February which highlighted the plight of medallion owners who faced seizure of the expensive metal shields that allow taxi drivers to pick up hail from the street, but whose value has been falling for years. .

The story revealed that more than 250 medallions were seized in the first three months after a previous debt relief package. TLC data shows there have been 281 foreclosures this year, including 31 last month.

Share.

Comments are closed.