After Sale by NCUA, Taxi Drivers Open Talks With Hedge Fund About Medallion Loans

Representatives of the New York City taxi medallion owners and drivers are asking Marblegate Asset Management LLC to set “universal standards” for the repayment of taxi loans 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 Wednesday.

“What we offer is a collective voice,” she said, adding that it would be difficult for Marblegate to manage thousands of medallion loans individually. “There’s no time for that kind of review of each application.”

Desai said she met with Marblegate officials and presented them with a proposal to establish basic loan 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 did not respond to a request for comment and the company has declined to discuss its plans since the 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 owners.

The NCUA announced the sale, having rejected a plan by New York City officials and drivers’ representatives to give them time to form a public-private partnership to purchase thousands of loans.

Under that plan, city officials had hoped to restructure the loans in an effort to allow drivers to pay $900 a month, which they said 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 face the same issues — dwindling medallion values because of ride-sharing competition and large loan balances.

“The drivers have all faced the same set of conditions,” she said.

“We’re looking forward to continuing to talk to them,” Desai said, referring to negotiations with the hedge fund.

Marblegate was founded in 2008 and, according to its filings with the Securities and Exchange Commission, managed about $1.4 billion of its advisory clients’ money.

“Marblegate’s investment style is opportunistic and not focused on any particular industry or sector,” the company explained in its filings. “Marblegate believes that investment opportunities result from a variety of corporate events or technical factors that give rise to 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 income taxes.

The NCUA loan purchase is not the company’s first foray into the taxi business. In 2018, the company purchased many medallion loans that had been held by Evgeny Freidman, New York City’s notorious “taxi king.”

Freidman was known in the New York media as the “taxi king” because he, at one time, reportedly owned and managed more than 1,000 medallions, including some owned by Michael Cohen, President Trump’s former personal attorney. He also was reported earlier this year to owe more than $18 million in New York State taxes.

Industry sources identified Marblegate at the time as the straw purchaser, Nardo Acquisitions, that purchased 131 medallions for $22.27 million in 2018.

Someone appears to have a sense of humor at the company. For those unfamiliar with the 1970s-80s TV series “Taxi,” Elaine Nardo was a taxi driver played by Marilu Henner.