$6.2M bankruptcy in Bedford Stuyvesant

Nathan Wagschal, an owner of the 10-unit walkup at 856 Greene Avenue in Bedford Stuyvesant, Brooklyn, filed to place the property in chapter 11 bankruptcy protection through a petition filed in the Eastern District of New York yesterday. He is seeking a broker to sell the property.

Wagschal filed the petition to hold off a looming ruling in a pre-foreclosure case filed in the Eastern District in 2021, in which the judge was set to approve a motion for summary judgment if Wagschal did not file a response to that motion, and he had not.

In addition to the foreclosure case, there are two landlord-tenant cases in state court which Nathan Wagschal brought.

In the pre-foreclosure case, a special servicer for the securitized lender Series 2019-H6 brought the case in federal court on November 10, 2021 in the Eastern District of New York, 1:21-cv-06255.

In the federal case, the judge had imposed a May 10, 2023, deadline for response papers to the lender’s motion for summary judgment, and according to a review of court records, Wagschal did not file a response.

The judge had warned a week earlier that, “If Defendant fails to file opposition papers by May 10, 2023, the Court will take Plaintiff’s motion for summary judgment under consideration as unopposed,” which would essentially ultimately set the foreclosure auction for the property barring an appeal or a bankruptcy filing.

In an affidavit filed along with the bankruptcy, Wagschal states, “The Debtor wishes to continue settlement discussions with the secured creditor while at the same time using an experienced commercial real estate broker to market the property for sale if a settlement isn’t reached. The Debtor believes that professional marketing the property will achieve the highest and best purchase offer can for the the benefit of all parties.”

According to an affidavit filed along with the motion for summary judgment, the lender representative wrote that, “Borrower missed one or more monthly payments on the Loan in 2020, then stopped making any payments at all in December 2020. Borrower’s default caused the servicing of the Loan to be transferred in or around March 2021 to Midland as the Special Servicer for Lender.” The total due as of January 6 was $8,305,187. The filing states Joel Wagschal is an unsecured creditor owed $200,000.
Bankruptcy LINK

Direct link to the property’s ACRIS page and link to DOB NOW portal.