MERIDEN — Two vacant Colony Street buildings — which city officials had hoped to see auctioned off in foreclosure last month — are embroiled in complex litigation as lawyers attempt to recoup losses for the buildings’ owner, the plaintiff in a landmark civil case stemming from an Arizona helicopter crash two decades ago.
Chana Braun Daskal, 45, of Brooklyn, New York, was the sole survivor in a 2001 crash of a Grand Canyon sightseeing helicopter that killed her husband and four other people. Daskal is the principal of CBD & Sons Ltd., the ownership entity of 9-11 and 13-17 Colony St., according to business and legal filings.
Although city officials consider the properties a vital part of revitalizing Meriden’s transit-oriented district, how they came into Daskal’s possession is the subject of litigation in New Jersey, New York and Connecticut courts.Helicopter crash
In August 2001, Daskal, the mother of two boys, then ages five and three months, boarded a helicopter sightseeing tour of the Grand Canyon in Arizona with her husband David Daskal. The couple were with four other New York tourists when the helicopter crashed near the canyon’s western end, 60 miles east of Las Vegas, according to the Associated Press.
The aircraft “plummeted downward and crashed into the Grand Wash Cliffs 3,700 feet up a 5,600-foot escarpment,” according to a lawsuit filed on Chana Braun Daskal’s behalf.
Daskal suffered burns over 80 percent of her body, had both feet amputated, is paralyzed from the waist down and doesn’t speak. She requires constant care and her sons were raised by her family, according to legal filings. After a lengthy lawsuit, she received a $20 million net settlement from Papillon Helicopter Tours.
CBD & Sons Ltd. is a trust fund established for Daskal’s care and her sons’ future. The fund was established by a longtime family friend Gary Escandon, who later became Daskal’s co-trustee and power of attorney. It was also a vehicle for real estate and other business investments, according to several lawsuits including one filed against Escandon in Kings County, New York Supreme Court.
Daskal’s new power of attorney, Aaron Twersky, has alleged in legal filings that Escandon defrauded the fund of more than $6 million, which includes a $750,000 mortgage to Paul Edwards of Connecticut.
Escandon could not be reached for comment. A representative for the Daskal family referred questions to Twersky, who issued a brief statement to the Record-Journal.
“The Colony Street properties are yet another tragedy that Chana Daskal has had to endure in her young life to date...” Twersky said by email.
He declined to answer further questions, deferring to legal filings.Colony Street
Edwards bought the two Colony Street buildings from the city in 2006 for $1 and bank financing. The state Department of Economic and Community Development also had a stake in the property which Edwards hoped to renovate and reopen as a night club, restaurant and apartments.
The buildings were the DECD’s security on a $100,000 small business express loan to Edwards’ company, Pony Entertainment, according to the DECD. The department fought the city’s recent attempts at a strict foreclosure in the hopes of reclaiming its losses in a sale.
Edwards, who could not be reached for comment, struggled to finance the renovations until a mortgage broker who knew Edwards proposed a loan to the co-trustee for CBD & Sons Ltd., according to a civil lawsuit filed in U.S. District Court in New Jersey naming Richard Setteducati, the Shore Lending Group LLC, GMH Mortgage Services LLC, and appraisers Charles Liberti and Raymond Miller. The case is ongoing.
Setteducati, Miller and Liberti could not be reached for comment.Mortgage
Twersky or other members of his firm alleged in suits filed in New York and New Jersey that Escandon and Setteducati conspired to bring the loan to CBD to allow Setteducati to repay a debt to Escandon, who earned a $23,000 commission on the deal. Setteducati hired two Connecticut appraisers, who valued the properties in 2011 and 2012 at $780,000 and $900,000 to present to CBD and Escandon for approval.
A 2014 appraisal put the value at $350,000. But the loan from the trust was approved based on the 2011 and 2012 appraisals, and Edwards got the mortgage, according to the lawsuit.
The lawsuit seeks in excess of $4.5 million each on several counts against the defendants and Daskal’s signature appears on the complaint.
Daskal’s new trustee Twersky is trying to recoup the trust’s losses, according to the suit. In court filings, the loan to Edwards is now valued at $1.5 million. The trust has not received any payments on the failed loan, despite court orders against Edwards and Escandon, Twersky alleged in later filings.
Twersky also filed a lawsuit in November on behalf of Daskal and the Chana Daskal Revocable Trust against Wells Fargo in the U.S. District Court Eastern District of New York. The Paul Edwards loan is among several issues the bank allegedly overlooked while overseeing the Daskal trust.
Twersky and Ilana Neufeld of Twersky PLLC state in the amended complaint:
“Wells Fargo did not do any due diligence to ensure the Edwards loan was a good and prudent business decision, which it turned out not to be. The Edwards loan, which again consisted of $750,000 of Daskal’s money, was secured and collateralized by a simple mortgage on two properties Edwards owned in Meriden, Connecticut, which Edwards paid no consideration for and which were in terrible condition.”
Twersky stated that Edwards almost immediately defaulted on the loan and the co-trustee never did anything to foreclose on the properties that secured it. Edwards stopped making payments in 2014, according to the lawsuit.
“Sufficient investigation and due diligence would have revealed the Edwards loan amount was too high for the collateral given by Edwards,” the lawsuit states.
CBD is seeking $12 million, alleging Wells Fargo breached its fiduciary obligations to Daskal.Buildings transfer
Edwards renovated the exterior of the buildings, but ran into roadblocks with interior renovation. At the same time, he had difficulties refinancing his mortgage for renovations due to economic conditions.
After getting the loan from CBD, Edwards defaulted a short time later and failed to pay the city taxes and water bills, according to legal filings. He was also trying to secure a loan with another mortgage company. Just as the city was about to sell the building in a foreclosure auction, Twersky stepped in to pay $92,000 in delinquent taxes in exchange for the deeds being held in escrow if Edwards couldn’t refinance.
The deal also included a stipulation that Edwards not file a lawsuit or for bankruptcy. But Edwards sued Twersky and CBD in U.S. District Court in Connecticut claiming he was under duress when he agreed to put the deeds in escrow. Twersky countersued Edwards for breach of contract and Edwards was ordered to pay more than $636,718 after subtracting the city’s appraised value on the buildings. Twersky recorded the deeds in Meriden land records and CBD became the legal owner of the two buildings, according to Paul Edwards vs. CBD & Sons LTD and Twersky PLLC.
Edwards filed for bankruptcy in 2018.
Escandon was fired from his post in 2015 and sued in Kings County Supreme Court in 2016 over the Edwards loan and other allegations related to the trust. After an inquest with a court referee, a judge ordered Escandon to pay Daskal $3.8 million in damages at 9 percent interest for the period from 2014 to 2018. The trust has not received payment, Twersky stated in recent filings.Falling debris
The Colony Street properties are crumbling and the city has tried unsuccessfully to move the trust to make safety improvements. City workers put up a fence to keep pedestrians from getting hit by fallen debris. The city has also imposed a blight lien of $100 per day and filed for foreclosure. The court set CBD’s liability at nearly $100,000 and set the auction date for May 22.
But CBD & Sons Ltd. stepped in for a second time and formed CBD Colony Street LLC. The company filed for bankruptcy in federal court in the Southern District of New York on May 21, effectively stopping the auction.
City Manager Tim Coon said the city will fight the delay and do what it can to get a sale on the buildings. CBD’s bankruptcy attorney said last week Daskal and CBD never intended to own the buildings and hope to sell the property.
The Colony Street failure also sparked changes in how the city transfers its properties to developers.
“The city had high hopes for that property,” former Economic Development Director Juliet Burdelski told the Record-Journal in 2014. “It hasn’t come together. We’re learning from that experience. Before transferring property to someone, there are now milestones that have to be met.”
A recent appraisal for the court put the values of 9-11 Colony St. at $185,000 and 13-17 Colony St. at $125,000.
A telephone conference between parties in the CBD Colony Street LLC bankruptcy case is set for June 25, according to court records.