North Loop – Before regulators took over a North Side bank, Misryoum reports it sought to recover millions tied to a rabbi facing criminal charges and a hotel developer with default claims.
Federal regulators have declined to explain what specifically triggered the January takeover of a North Side bank, offering only a broad description that pointed to “unsafe and unsound conditions” and an “impaired capital position.”
But Misryoum’s review of public records shows the collapse unfolded against a backdrop of high-risk lending disputes—including two attempts by Metropolitan Capital Bank & Trust to recoup roughly $8.5 million.. The cases connected the bank’s troubles to a Chicago-area rabbi facing criminal charges and a developer seeking to build a hotel tied to a long-delayed project.
The bank’s largest loss appears tied to loans made in 2014 to Rabbi Zvi Feiner and his wife. Hinde Feiner. records show.. Metropolitan Capital said it advanced about $4.5 million to support what the Feiners described as a series of nursing homes.. According to the bank’s court filings. the borrowers promised repayment linked to revenue from particular facilities—money the bank alleged was instead diverted to other debts.
A Cook County judge later cleared the Feiners, and Metropolitan Capital appealed.. In September 2020, an Illinois appellate court affirmed the decision, criticizing the bank’s lending process.. The court faulted Metropolitan for relying on the borrowers’ assurances rather than verifying whether pledged collateral could actually cover repayment.. That criticism landed less than a week before federal prosecutors indicted Feiner as part of a case that has since moved through the federal system and is set for trial later this year.
In the criminal case. prosecutors accuse Feiner and a colleague of orchestrating a Ponzi scheme. alleging they raised millions of dollars from investors.. Separate from the criminal matter, the Securities and Exchange Commission also filed a civil complaint in 2019.. Misryoum records describe that complaint as accusing Feiner of running a fraudulent scheme that portrayed investments as low-risk with high returns. while allegedly misusing investor funds to pay earlier investors and for personal use.
For the Feiner-related matters. the timelines now overlap: the SEC complaint appears to remain paused until the criminal case is resolved. while the bank’s own dispute wound through the courts years earlier.. Neither Feiner nor his attorney responded to inquiries, leaving the public record to do most of the explaining.
Metropolitan Capital’s second major problem loan—at least by the amount involved—was connected to Chicago developer Solomon Barket and his company Condor Partners.. Misryoum’s review of a 2024 lawsuit filed by the bank indicates the institution attempted to collect roughly $4 million tied to a hotel project planned for the site of the former O’Briens restaurant in Old Town.
The bank’s claims describe a deal that never fully moved from paper to payoff.. The project. known as the Duke of Wells. has been on the drawing board since 2016. according to descriptions tied to the development.. Barket’s plan envisioned a 12-story hotel with more than 200 rooms—an ambitious scale that. like many downtown projects. depends on steady financing and a clear path to construction timelines.
Complicating the picture, the bank’s loan involved foreclosure pressure and competing claims.. Barket’s primary lender, CIBC, also sued, alleging that Barket defaulted on repaying an approximately $7.7 million loan taken in 2018.. Court records indicate Barket currently owes more than $10.2 million, including penalties and interest, tied to that borrowing.
Metropolitan Capital sold its Barket loan to a group of Lombard investors led by James Avgeris last September, Misryoum’s review shows. It is not clear how much Avgeris’s group paid for the note, but the investors are described as pursuing repayment from Barket’s father, who acted as a guarantor.
Meanwhile, CIBC sold its own loan to a different set of developers.. That group includes Arthur Slaven of Centrum Realty and Development, along with his son Peter Slaven and other investors.. Misryoum records also indicate Slaven’s team is pursuing foreclosure on the property. a move that could reshape who collects what—potentially erasing what remains owed to Metropolitan and other lenders if the property ultimately satisfies the debts in a different way than expected.
These disputes matter beyond the courtrooms because bank failures rarely come down to a single deal.. In the language regulators used when they took control of Metropolitan Capital in January. the underlying issue was financial stability—specifically conditions labeled unsafe and unsound and an impaired capital position.. In other words. the bank may have been exposed not just to legal outcomes. but to the broader risk profile of its lending portfolio.
Misryoum also found that the state agency overseeing financial institutions described the takeover as ensuring a seamless transition for customers and full protection of customer deposits after a Detroit bank agreed to buy Metropolitan.. At closing, the bank had about $261 million in assets, officials said.. That deposit protection framework can preserve day-to-day banking for consumers even as disputes and losses mount in the background.
Still. the collapse underscores a more familiar national lesson: when banks lean heavily on nontraditional lending and contested repayment structures—particularly where collateral. timelines. and borrower representations become disputed—legal uncertainty can translate into financial strain.. For the families. investors. and would-be hotel customers in Chicago. the question is simple even when the paperwork is not: who pays when a loan’s promises collide with insolvency. fraud allegations. and years of delayed projects.
As the criminal case against Feiner proceeds and the foreclosure efforts around the Duke of Wells site continue. the story is likely to widen.. Misryoum expects that the final costs will depend not only on what courts determine. but also on how regulators have assessed the bank’s capital during its last months—an internal evaluation the agency has so far refused to spell out.