Before regulators closed North Loop bank, millions in loans to Chicago rabbi, developer went uncollected

Financial regulators won’t say what led them to take control of a North Side bank in January except that it involved “unsafe and unsound conditions and an impaired capital position.”

But public records show that, prior to the abrupt shutdown and sale of Metropolitan Capital Bank & Trust, the institution tried to claw back two troubled loans totaling roughly $8.5 million — one involving a West Rogers Park rabbi now facing criminal charges, another involving a developer wanting to build a hotel on the site of the former O’Briens restaurant in Old Town.

Of that total, Metropolitan Capital Bank appears to have lost $4.5 million it lent to Rabbi Zvi Feiner and his wife Hinde Feiner in 2014 to help finance a string of nursing homes, records show.

The bank sued in 2017, accusing the Feiners of fraud, saying they promised to repay the loan with revenue from specific nursing homes, though that money was dedicated to other debts.

A Cook County judge cleared the Feiners. Metropolitan appealed, and it lost in September 2020, when the Illinois appellate court ruled that bank officials had failed to ensure that the Feiners could repay the money.

“Metropolitan, as a sophisticated lender specializing in nontraditional loans requiring personal guarantees, should not have simply relied on Mr. Feiner’s representations regarding the status of pledged collateral,” according to the opinion written by Judge Mary Mikva.

Days before Mikva’s ruling, federal prosecutors indicted Feiner in a case that is set for trial later this year.

Feiner and a colleague were accused of “orchestrating a Ponzi scheme that raised millions of dollars from investors.”

The U.S. Securities and Exchange Commission filed a complaint in 2019 against Feiner for “operating a fraudulent scheme that targeted investors in the Orthodox Jewish community in the Chicago area.”

The SEC complaint said “the defendants falsely told investors the investments were low-risk and would generate high returns and also misappropriated investor funds to pay distributions to earlier investors and for their personal use.”

The SEC action appears to be on pause until the criminal case is resolved.

Neither Feiner nor his attorney would comment.

Metropolitan Capital also tried in recent years to recover $4 million it lent to Chicago developer Solomon Barket and his company Condor Partners for a Wells Street hotel project that has been on the drawing board since 2016, according to a lawsuit filed by the bank in 2024 to try to collect the money.

Barket’s primary lender, CIBC, also filed a lawsuit, saying he defaulted on repaying the $7.7 million loan he got in 2018. He currently owes more than $10.2 million relating to that borrowing, including penalties and interest, records show.

Barket’s company website still touts the hotel project called the Duke of Wells as a 12-story hotel with more than 200 rooms that would be built on the former site of O’Briens restaurant owned by Peter O’Brien. He closed the restaurant, hoping to reopen in Barket’s new hotel. It’s not clear whether O’Brien still plans to do that.

There’s still an O’Brien’s location on the Chicago Riverwalk and one at O’Hare Airport.

Metropolitan Capital sold its Barket loan last September to a group of Lombard investors headed by James Avgeris. It’s unclear how much Avgeris and his partners paid for the loan. They are still trying to force Barket’s father to repay the money, as he was a guarantor.

CIBC subsequently sold its loan to a group of developers headed by Barket’s former partner, Arthur Slaven of Centrum Realty and Development. Slaven’s team also includes his son Peter Slaven and two Las Vegas casino moguls, Anthony Sanfilippo and Carlos Ruisanchez.

If Slaven’s group ends up owning the property, it’s unclear what they want to build there.

Slaven’s group is still trying to foreclose on the property, which could erase the money owed to Metropolitan Capital and others.

Frank Novel, who’d been a top executive at Metropolitan at the time of the bank collapse, declined to comment.

At the time the Illinois Department of Financial and Professional Regulation announced the takeover, the agency noted that a Detroit bank agreed to buy Metropolitan, ensuring a “seamless and immediate transition of services for customers and full protection of customer deposits.”

The bank, which opened in 2005, had about $261 million in assets at the time of its closing, officials say.

In 2019, state and federal regulators reached a consent agreement with Metropolitan that hinted at serious problems and required stepped-up oversight by the bank's board and administrators.