Gisele Allard, the Harlem woman who’s already seen one of her buildings auctioned over a debt that started at $100,000 and ballooned to over $7 million thanks to a 25% interest rate, is expecting to see two more brownstones get put on the block before she gets a shot at relief.
The sale of 32 W. 120th St. and 239 Lenox Ave. is scheduled to commence Thursday and will be handled by Maltz Auctions, which has advertised the landmarked buildings on its website for weeks.
Another of her properties, 50 E. 126th St., has already been sold for $1.2 million. That building has been the source of years of headaches for Allard and is the primary reason she finds herself in her current predicament.
It’s the reason she owes $7 million — a debt she says is unjust and the result of one judge’s erroneous decision that approved a 25% compounded interest rate.
Allard, 75, tried last week to convince another Manhattan Supreme Court judge to slowdown the process by which her assets are being sold off to pay that debt, but she failed. Judge Arlene Bluth denied Allard’s motions, stating it wasn’t her place to overturn another judge’s ruling.
“It is an amazing thing that justice cannot be rendered by the Supreme Court,” said Allard, who plans to appeal. “I feel very sad about that.”
Allard’s ordeal began in 1998 when she purchased the building on a crime-plagued E. 126th St. block for $135,000. She paid $35,000 upfront as a down payment and took out a $100,000 loan from the seller, Robert Robinson, with an interest rate of 6%.
Not long after the purchase, Robinson died. Allard maintains she made initial some payments to him and attempted to make payments to his estate and the legal team representing it, but that eventually, after finding no one to accept her money, she stopped sending it.
A decade later, Robinson’s estate picked up the debt in court and argued Allard was in default and now subject to a higher interest rate, 25%. A court-appointed referee tallied the bill at $400,000, but Manhattan Supreme Court Judge Judith McMahon awarded a much higher total after apparently accepting the estate’s argument that the 25% rate should be compounded monthly.
And that’s how Allard’s bill got so high. Robinson’s estate sold the debt and judgement to 50 East 126th Street Realty LLC, which will get the proceeds from the auctions once they sales are finalized.