A10 Capital battles Brooklyn borrower over $31.8M judgment

Lender A10 Capital filed a complaint seeking to restrain borrower Serabjit Singh Malhotra from selling or transferring assets in order for the lender to collect on a $31.8 million judgment. Malhotra counters in court filings that he is willing to settle but the lender’s terms are too onerous.

A10 Capital states it holds an entirely unsatisfied $31.8 million judgment from 2022 against Malhotra (Brooklyn 521370/2021) related to a personal guaranty on a $23.9 million loan from 2019 secured by 157-163 13th Street, 521 3rd Avenue and 529 3rd Avenue in Brooklyn, and is seeking an emergency order to prevent any sales or transfers of eight entities, including those three properties, three additional Brooklyn properties Malhotra owns 257 Washington Avenue, 592 Dean Street and 594 Dean Street, and several entities through which Malhotra owned an asset, but had sold it prior to this lawsuit.

PincusCo reported on the 2021 case here.

Court filings represent the position of one party and are not necessarily accurate or complete.

Case 511887/2024 LINK

Malhotra, in a December 2023 court response to the 2021 case, said, “As a result of the COVID-19 pandemic, the LLCs are in distress, and I am struggling to restructure them through the refinance and or sale of the properties… Judgment was entered against me and in Plaintiff’s favor on June 29, 2022 and in the sum of $31,831,921… I have offered to settle with Plaintiff for $23,500,000.00, an amount that I believe I could obtain in the sale of the mortgaged property. I have also offered to provide Plaintiff with the deed to the mortgaged property as settlement. Both of these offers have been rejected when Plaintiff countered with $23,500,000 PLUS the deed to the mortgaged property. Plaintiff has refused to negotiate in good faith with me.”

The property

The office building at 157-163 13th Street in Gowanus has 24,840 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 92 feet and is 100 feet deep with a total lot size of 9,266 square feet. The zoning is M1-2 which allows for up to 2 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $4 million.

Direct link to the property’s ACRIS page.