Bank Bid to Foreclose on Two Chinatown Buildings Halted by Appeals Court–For Now

A panel of judges has temporarily halted the foreclosure of two Mott Street buildings belonging to a longtime Chinatown resident, while they review her appeal which argues that she was grievously misled by mortgage lenders.

Ping Cheung, known as “Penny” to friends and family, immigrated to New York City 45 years ago. In 2017, she took out a $10-million mortgage from Global Bank for 43 and 45 Mott St., and told Our Town in July that she has served as the owner-super of both buildings since. This is reiterated by city and court documents. Cheung says that she has never missed an $80,000 mortgage payment.

That same year, Cheung and her son, Kevin Ye, went into business with a restaurateur named Peter Park, opening a ground-floor Korean BBQ establishment at 43 Mott and taking out a $1.2-million loan from the lender New Bank to do so. Cheung and Ye agreed to take a 20 percent stake in the restaurant, while Park would be responsible for the other 80 percent.

When the COVID-19 pandemic hit, business stopped, with the restaurant shuttering while money was still owed on New Bank’s loan. Cheung and Ye paid their share, $380,000. Park, who owed $500,000, fled. He hasn’t been seen since, according to Cheung.

Things began to fall apart from there, she said, when an affiliate of Global Bank—Anthony Hsu—advised her that it would be best to pay off Park’s $500,000 herself, and that she could do so by giving the money to none other than Global Bank, which was responsible for the mortgage on her buildings. Cheung says she believed that Global Bank would then pass the money along to New Bank, making the loan debt for the restaurant whole. She attested to this in an affidavit.

Instead, Global Bank put the money into a Cash Collateral Fund, where it reportedly sat undistributed to New Bank. Cheung had signed a forbearance agreement, which she says she didn’t understand because she speaks Cantonese; the forbearance agreement didn’t compel Global Bank to pay New Bank on Penny’s behalf.

Cheung argues that she was surprised when she found herself suddenly defaulting on New Bank’s loan, as she thought she had taken the necessary steps to repay it.

The catch, however, would be worse. Now that she had defaulted on the restaurant loan, Global Bank could deem her a credit risk and “cross-default” on her $10-million mortgage, too; this could happen despite her never having missed a mortgage payment.

Her lenders sought foreclosure, and the Mott Street buildings were initially set to be auctioned off in January of this year. Cheung sent a letter about her side of the story to the New York State Attorney General’s Office shortly beforehand, however, and a judge briefly halted the auction—before reversing himself in June. Cheung’s claims that she been misled when she signed the forbearance agreement, Judge Francis Kahn ruled, were “conclusory and virtually uncorroborated.”

Cheung has since appealed this ruling. She has also countersued Global Bank and its affiliate associated with Anthony Hsu, Amerasia Bank, for $25 million each. She’s alleging that they have engaged in breaching their fiduciary duty.

On Aug. 21, the appeals court issued their temporary stay on the foreclosure, while Cheung’s appeal plays out in court. A representative for Cheung did not have further comment as of press time. Global Bank had no comment as of press time.