3 Brooklyn rentals with 145 units, $25M in debt, placed into bankruptcy

The real estate investor and borrower Samuel Hertz placed three Brooklyn rental buildings that have a total of 145 residential units and $25 million in debt from ConnectOne Bank, into bankruptcy last week in order to remain in control of the buildings while negotiating with the lender, court records show.

Hertz filed the bankruptcy actions in the U.S. Bankruptcy Court’s Eastern District of New York on January 21, 2026. The filings come just two months after the bank filed three pre-foreclosure actions in New York State Supreme Court in Brooklyn, alleging each property’s loan was in default. Typically a borrower files a bankruptcy just prior to the foreclosure auction, which is often a year or two after the foreclosure action is filed.

The bankruptcy cases will likely be jointly administered since they have the same borrower and lender.
Bankruptcy cases: 1-26-40286-jmm, 1-26-40287-jmm, 1-26-40288-jmm
State court cases: 539039/2025, 539056/2025, 539072/2025

In the bankruptcy filing, Hertz says the 2019 changes in the rent laws and the pandemic have “eroded” the value of the properties — all purchased in 2018 — even as he is struggling with rent collection and evictions. “While the Properties present significant challenges in today’s environment, I believe that a restructuring or refinancing can still be achieved, albeit not for the full amount of the debt, since market conditions have changed for the worse. Nevertheless, the Debtors hope to utilize Chapter 11 to enter into market driven, realistic and meaningful discussions with the Lender.”

In the bankruptcy filing, Hertz says, Shayn Realty LLC owns the 55-unit building at 420 Avenue F, in Kensington, Brooklyn, subject to a mortgage securing a loan from the Lender in the initial principal amount of $9,550,000, “with a balance claimed to be due in the total amount $8,863,621.91 as of October 21, 2025, including principal in the sum of $8,427,310.62, together with interest, fees and costs.”

The entity Zevh Realty LLC owns the building at 2302 85th Street, in Gravesend, Brooklyn, with approximately 42 units, and it is “subject to a mortgage securing a loan from the Lender in the initial principal amount of $6,790,000, with a balance claimed to be due in the total amount of $6,357,204.57 as of October 21, 2025, including principal in the sum of $5,991,786.24, together with interest, fees and costs.”

The entity Rache Realty LLC owns the building at 320 Ocean Parkway, in Kensington, Brooklyn, with approximately 48 units, “subject to a mortgage securing a loan from the Lender in the initial principal amount of $8,660,000, with a balance claimed to be due in the total amount $7,951,997.68 as of October 21, 2025, including principal in the sum of $7,641,950.53, together with interest, fees and costs.”

Direct link to the property’s ACRIS page 420 Avenue F
Direct link to the property’s ACRIS page 2302 85th Street
Direct link to the property’s ACRIS page 320 Ocean Parkway