He’s too big to fail — for now.
A judge froze 87 medallions and cabs belonging to the city’s largest taxi operator, but denied a bank’s request to seize the property after the taxi king’s lawyer said the move would crush the already Uber-beleaguered yellow cab industry.
Citibank’s attempted grab to cover past-due loans would “destroy the medallion market,” said fleet owner Gene Friedman’s lawyer, Brett Berman.
In court Tuesday, Berman also claimed that putting Friedman, who controls 900 medallions, out of business would harm the public by slashing the number of cabs on the road.
“I think the environmentalists would disagree with you,” Manhattan Supreme Court Judge Jeffrey Oing quipped.
He gave Friedman a month to settle his $31.5 million debt to Citibank — and warned that at the next court hearing on April 30, he may “ultimately grant the seizure request.” Oing held off on seizure, in a nod to the changing industry, saying “time is money” because “medallions are worth a lot of money, so far, until … Uber.”
Friedman has claimed he can’t pay back the loans because the bank tightened up its lending practices at a time when he’s been hit hard by the e-hailing app.
Berman said after the hearing, “We believe that Citibank simply does not want to be in the medallion industry any longer, and appreciate that the judge required them to negotiate.
“Hardball is not beneficial in a time of radical change,” Berman said.
Citibank’s lawyer, Nathan Schwed, protested that “the market reality does not impact our rights” and that Friedman’s loan agreement specifically allows the bank to take his collateral if he defaults on the loan.
But Oing said the medallions are better left on the road making money as opposed to a seizure that would end in a “fire sale.”
The value of the medallions plummeted from $1.05 million in June 2013 to $800,000 this past January as Uber has lured drivers away.