A judge has rendered decisions in at least five of the dozen foreclosure lawsuits filed last year against companies managed by Sophie Cefalu.

Judge David Krogmann ordered that some properties be auctioned to recover almost $1 million owed on them, and he assigned priority to competing claims in three other cases, according to documents filed late last month in state Supreme Court in Warren County.

Krogmann ordered that four Glens Falls properties be sold in auction to recover funds for the SEFCU credit union, which held mortgages for two LLCs managed by Sophie Cefalu.

The Smith Flats Office Center at the corner of Bay and Washington streets, as well as a few rental properties on New Pruyn, Bacon and South streets, will be sold to recoup some of the $975,000 owed on the buildings.

The SEFCU cases were assigned to a referee, who will schedule the auctions to take place at the Warren County Municipal Center.

Late last week, Krogmann also issued a decision pertaining to three foreclosure actions on the same address. Because all three claimed to hold the first-priority mortgage, Krogmann settled the issue of who was the primary lender.

The order of multiple mortgages is important because it determines who is paid first in the event of foreclosure.

The three cases were originally filed last year regarding 86 South St., a small building across from Rite Aid.

SBC Properties LLC - a group managed by Sophie Cefalu and affiliated with her son, Charles Cefalu, who often represented the company in real estate transactions - bought the South Street building in 2005 from Ann and Rolando de Avila.

The de Avilas loaned SBC the full amount and believed they held the only mortgage. But on the same day of the sale, SBC took out a second, smaller mortgage from a real estate group where Charles Cefalu served as treasurer, records show.

When the mortgages were recorded in the Warren County clerk's office, the smaller one was listed first.

Things got even more complicated when the real estate group decided to sell its interest in the "other" mortgage - twice. The loan was first transferred to Queensbury residents Robert and Karen Olson in 2005, and again to a Lake Placid investor group as part of a larger loan consolidation a few years later.

It wasn't until the Lake Placid group started foreclosure proceedings on a number of properties, including 86 South St., that the other mortgage-holders became aware of one another and followed suit.

In his recent decision, Krogmann addressed all three cases together. He decided that the de Avilas had the primary mortgage, even though it was not recorded as such, because they conveyed the property in question to SBC.

After giving priority to de Avila, Krogmann said he would not decide who is the rightful owner of the other mortgage - the Olsons or the Lake Placid group. He recognized that the mortgage was assigned twice, and said those two parties may challenge each other's claims in a separate lawsuit.

For the Lake Placid Group and the Olsons, the legal issues with the Cefalu LLCs don't end on South Street, as both parties are seeking to foreclose on other properties.

The Olsons also hold a mortgage for a house on New Pruyn Street. A court-appointed referee determined SBC owes the couple about $51,000 in that case, but it has not yet been sent to auction.

The Olsons' attorney was not available for comment this week.

As for the Lake Placid group, there were five other properties cited in its original foreclosure lawsuit, totaling more than $500,000 in loans.

In his recent decision, Krogmann threw out the defense and granted relief to the Lake Placid Group, according to attorney Steven Farer, a partner with the law firm representing the investors.

The judge's decision states that the Cefalu LLCs "failed to support any of the denials" or other claims they made when responding to the lawsuits.

Farer said that, generally, the next step is to assign a referee to compute the amount due, followed by a foreclosure judgment and auction.

Earlier this summer, one other pending foreclosure lawsuit was decided. A referee determined that SBC Properties owes a Florida investor $150,000 for a mortgage on 24 Broad St.

The referee could not be reached this week for an update.

Among the Cefalu-affiliated foreclosure lawsuits that have yet to be decided are cases involving Crandall Square Condominiums, which is the former convent on Maple Street, and 46-56 South St., a building at the corner of South and Elm streets.

Sophie Cefalu did not return The Post-Star's call this week seeking comment. Her son, developer Charles Cefalu, said in an e-mail on Tuesday that he has nothing to do with the cases and has no ongoing role with the LLCs.

In the past, he handled real estate transactions for the groups, and presented himself as the face of the groups his mother managed to investors, public officials and media. He has said that the economy was to blame for many of the foreclosures.

"I would hope that the company and its lender(s) can come up with a suitable workout plan and work in a collaborative fashion to resolve the litigation and move forward, while taking into account the challenging economy that certainly has negatively impacted many companies," he said Tuesday in an e-mail.

Sophie Cefalu's investor groups appeared on the Glens Falls scene about five years ago with the goal of revitalizing commercial and residential properties. The efforts peaked with the conversion of the former St. Mary's convent into condominiums.

A few units were sold, but not enough to keep the construction loan out of default. Since the spring of 2009, about a dozen foreclosure actions were initiated for mortgages on that property and others in the city.

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