Judge Blocks Taxi King's Abandonment of Cabs in Lender Dispute
August 24 2016 - 8:03PM
Dow Jones News
By Katy Stech
A bankruptcy judge blocked New York taxi mogul Evgeny "Gene"
Freidman from abandoning 46 taxis outside the Citigroup tower in
Queens after he threatened a very public surrender to the lender he
has battled since 2014.
Bankruptcy Judge Carla Craig on 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
them securely in his possession until further notice.
Earlier this week, Mr. Freidman said he couldn't refinance his
debt to Citibank NA and told the judge he would surrender the
medallions, which give drivers of each vehicle the right to pick up
street hails in Manhattan's lucrative central business
district.
The surrender marks a turning point for Mr. Freidman, who put
dozens of his taxi companies in bankruptcy protection 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
in earlier court papers that 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 taken some business from taxi drivers. Citibank has denied
there was a bank error and Mr. Friedman's other allegations.
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 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.
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 and expanded it into one of the New York
City's largest taxi fleets. A company spokesman said in July 2015
that it had 1,800 taxis nationally.
Write to Katy Stech at katherine.stech@wsj.com
(END) Dow Jones Newswires
August 24, 2016 19:48 ET (23:48 GMT)
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