After the sale by NCUA, taxi drivers open discussions with hedge funds about Medallion loans
Representative of Owners of taxi medallions in New York City and drivers ask Marblegate Asset Management LLC to set “universal standards” for the repayment of taxi loans that the hedge fund has purchased from the NCUA.
And so far, Marblegate officials have been listening, Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said on Wednesday.
“What we offer is a collective voice,” she said, adding that it would be difficult for Marblegate to individually manage thousands of medallion loans. “There is no time for this type of examination of every application.”
Desai said she met with Marblegate officials and presented them with a proposal to set basic credit guidelines for all drivers. That proposal included a plan that would allow drivers and medallion owners to pay $ 900 a month on their loans.
Marblegate officials didn’t respond to a request for comment and the company has since declined its plans NCUA announced the sale of the loans last week.
The NCUA had thousands of taxi loans, largely due to the failure of two credit unions, Melrose Credit Union and LOMTO Federal Credit Union – which had a large concentration of loans to drivers and medallion holders.
The NCUA announced the sale after rejecting a plan by New York officials and driver representatives to give them time to form a public-private partnership to buy thousands of loans.
As part of that plan, city officials had hoped to restructure the loans to allow drivers to pay $ 900 a month, which they thought was an affordable amount.
Instead, the NCUA sold the loans to Marblegate, a Connecticut-based hedge fund.
Desai said Marblegate officials understood that most drivers faced the same problems – dwindling medallion values due to ridesharing competition and large loan balances.
“The drivers all experienced the same conditions,” she said.
“We look forward to continuing to speak to you,” said Desai, referring to the negotiations with the hedge fund.
Founded in 2008, Marblegate managed approximately $ 1.4 billion of its advisory clients’ money, according to the Securities and Exchange Commission.
“Marblegate’s investment style is opportunistic and not geared towards a specific industry or sector,” the company stated in its filing. “Marblegate believes that investment opportunities arise from a variety of corporate events or technical factors that result in mispriced loans and securities trading at a discount to their intrinsic value.”
Like many hedge funds, Marblegate operates some of its funds in the Cayman Islands, which allows investors to avoid unearned business taxes.
The NCUA’s loan purchase is not the company’s first foray into the taxi business. In 2018, the company bought many locket loans held by Evgeny Freidman, New York’s infamous “taxi king”.
Freidman was known as “the taxi king” in the New York media because he once reportedly owned and administered more than 1,000 lockets, including some owned by Michael Cohen, President Trump’s former personal attorney. Earlier this year it was reported that he owed more than $ 18 million in New York state taxes.
Industry sources identified Marblegate at the time as a straw buyer, Nardo Acquisitions, who bought 131 medallions for $ 22.27 million in 2018.
Someone seems to have a sense of humor in the company. For those unfamiliar with the TV series “Taxi” from the 1970s and 1980s: Elaine Nardo was a taxi driver, played by Marilu Henner.