By Adam Pincus
An executive for FTI Consulting placed the retail and commercial building 381 Broadway in Tribeca into bankruptcy protection Friday, noting the property was estimated to be worth $19 million but has debts of at least $23 million, according to the Chapter 11 filing made in Manhattan’s Southern District of New York.
The action was filed following a State Supreme Court judge’s ruling earlier this year ordering a sale of the building. The entity that owns the property is 381 Broadway Realty Corp.
Gary Tse was the guarantor for several loans. His family has owned the property since at least the 1980s. Tse is listed as a co-debtor in the bankruptcy filing. Alan Tantleff, a senior managing director at FTI was the signatory on behalf of the debtor. Kevin Nash of Goldberg Weprin Finkel Goldstein LLP was the debtor’s attorney. The date of the signatures on the filing was November 13, 2020, one week after the document was filed.
The debt on the building slowly grew over the past two decades. The property had loans of about $2.8 million in the early 2000s, but Tse increased that in 2005 to $4 million, then added $1 million in 2009. The total debt was $6.5 million in 2013, but then over the next two years the debt was increased to $15 million and consolidated by Ladder Capital, which assigned the debt to a mortgage-backed security. Then in 2017, Tse borrowed a total of $6 million from Titan Capital.
By 2018, the larger loan was declared in default, and a special servicer filed to foreclose. It sold the loan in October 2018 to Churchill Real Estate Holdings, which continued the state court action. Titan Capital in April 2019, filed to foreclose on its loans.
The bankruptcy filing states the current value of the building is estimated to be $19 million. The filing notes Churchill has a claim of $20 million and Titan Capital has a claim of $3 million. There is also a list of unsecured creditors, though the dollar amounts are not provided, and each value was listed as “unknown.”