Titleserv owner protests private jet debt
In better times, Woodbury-based Titleserv Inc. was one of the nation's largest title insurance agents, with some 160 employees and its own Gulfstream III jet.
Now the firm has closed, and its owner is trying to reverse a judge's order to pay off a $4 million loan on the plane, which has been repossessed and sold, according to papers filed in a lawsuit by the company guaranteeing the loan.
Titleserv's owner, James Conway III, has asked for the case to be reheard. The guarantor, Stewart Information Services Corp., filed court papers this week arguing that the April 16 judgment should stand.
Conway "seeks to delay further his absolute and unconditional liability" to pay the debt, the plaintiff's attorney, Benjamin Nagin, wrote in court papers.
Conway's attorney, Andrew Luskin, and Nagin declined to comment.
Titleserv is one of many Long Island firms that profited from the long run-up in the real estate market, though few others were so flush they spent millions on a corporate jet. Like many of those companies, Titleserv imploded in the wake of the housing crash. It shut down abruptly in April 2011, after lenders Citibank and Chase stopped referring business to it.
Three weeks later, the Federal Bureau of Investigations raided its offices and collected records. The 25-year-old firm, which had operated in 47 states, faces multiple lawsuits claiming millions of dollars were missing from its accounts.
According to Nassau County Supreme Court Justice Timothy Driscoll's April 16 order in the lawsuit over the airplane loan, a Titleserv affiliate borrowed $7 million in 2004 to buy the jet, then refinanced for about $5.6 million in 2007. The plaintiff, known as SISCO, guaranteed the loan after receiving a personal guarantee from Conway, according to SISCO's court papers.
Titleserv stopped making payments last year, according to court papers.
SISCO sued Conway and Titleserv last December. In response, Conway argued that he didn't actually guarantee the loan.
The judge rejected Conway's argument, and ordered him to pay SISCO.
Last month, Conway's attorney argued that it "strains credibility" to believe the amount paid by a SISCO affiliate for the plane at a foreclosure sale in January -- $350,000 -- was a fair price.
Conway is "simply interested in delay tactics or strategic accusations," SISCO's attorney fired back this week in court documents.