In search of $2B
NYU benefactor owes creditors: suit
Wealthy lead tycoon Howard Meyers, a large NYU benefactor, is facing a nasty bankruptcy court battle on Thursday against creditors who claim he defaulted on more than $2 billion in debt — while using proceeds of the corporate loans over the past decade for his personal gain.
The creditors, in a second Nevada legal action, also claim Meyers, the owner of a UK car battery recycler, exaggerated the financial health of his Eco-Bat Technologies to get the 2008 loan.
Lawyers for Meyers’ EB Holdings II, the parent company of Eco-Bat, will ask a Las Vegas judge to dismiss the involuntary Chapter 11 petition filed in March.
The creditors, led by GoldenTree Asset Management, are seeking to push the company into reorganization.
Among the creditors’ claims is that Meyers “paid himself and his family hundreds of millions of dollars, plus hundreds more through lucrative (and highly questionable) management and service contracts.”
After the $633 million loan, with an interest rate of 11 percent, according to court papers, Meyers became the owner of the Ingot, a 153-foot yacht with an asking price of $39.75 million, according to reports.
The yacht boasts five luxurious state rooms equipped with mahogany and white onyx fixtures.
Meyers also made large charitable donations since EB holdings took out the megaloan.
In April 2016, Meyers donated $30 million to New York University’s College of Nursing, which is now named for his wife, Rory, an alumna of the school.
In 2013, he offered a $15 million challenge grant to help fund the completion of a $62 million children’s garden, also named for his wife, in their home city of Dallas, according to reports.
The creditors do not claim any specific purchase or donation — or any expenditure made by the industrialist — was financed with purloined money.
The 10-year notes EB Holdings II issued in 2007 matured on March 31 and the creditors say they received none of the $2 billion they are owed, which includes accrued interest and default charges.
EB Holdings II’s sole asset is its 86.7 percent stake in British-based Eco-Bat Technologies, which sells lead obtained from used car batteries to new battery manufacturers.
Meyers’ bankruptcy court lawyers accuse the creditors of “forum shopping,” noting they are litigating the same incident in a separate Nevada court as well as bad faith refinancing negotiations.
“The [creditors] commenced [the bankruptcy court] case because the State Court Litigation, which they filed 10 months ago, has not proceeded favorably for them,” EB lawyers’ said in court papers.
Creditors in the state court case accuse Meyers of treating his “empire of companies as a personal piggy bank.”
Meyers transferred all of Eco-Bat’s permits and intellectual property from EB Holdings II into the name of one of his other companies and out of the creditors’ reach, it is alleged in the state court case, sched- uled to got to trial in 2018.
The creditors claim Meyers “employed various stalling tactics” to delay a resolution such as providing thousands of pages of unsearchable, image-only documents.
Meyers put that figure at 2 million pages in court documents filed in June.
Lawyers and reps for Meyers, EB Holdings and the creditors did not respond to requests for comment.