Arch Companies co-founder Jeffrey Simpson files personal Chapter 11 bankruptcy
146 East 89th Street (Credit - Cyclomedia)
Jeffrey Simpson, the co-founder of the real estate investment and development company Arch Companies, filed for personal bankruptcy yesterday in the Southern District of New York, under Chapter 11. The company has been embroiled in a long-running and acrimonious litigation over control of the company and the disposition of its assets, with Simpson on one side and his co-founder Jared Chassen and the Wiener family’s Canadian family office 35 Oak Holdings on the other. 35 Oak now controls most of Arch, according to the filings.
Case 26-10359-lgb LINK
Jeffrey Simpson Affidavit (pdf download)
The filing lists liabilities of more than $60 million, including a $50 million sum amount he characaterizes as a disputed partnership dispute with 35 Oak Holdings, $7.5 million to a Miami Beach investor, $3.8 million to Hirshmark Capital, and not yet known amounts to Arch Companies’ co-founder Jared Chassen and one of the Arch Companies holding companies, among others.
A focus of this bankruptcy is to halt the auction of his car repair location, Rever Motors at 1640 Montauk Highway, Water Mill, NY 11976. “The real property on which Rever Motors has carried on business is currently zoned for residential use. Because the Rever Motors business pre-dated the current zoning law, ts nonconforming use is grandfathered. 30. The real property on which Rever Motors has carried on in business is subject to a mortgage in favor of Watermill Capital Holdings. The Debtor has guaranteed the mortgage debt. 31. In the event of a cessation of the grandfathered nonconforming use, the value of the property, which may then be used only for a single-family residence, will substantially decline to the point of being less than the amount of the mortgage debt, which the Debtor has guaranteed.”
In 2024, Hirshmark Capital filed a pre-foreclosure action against an Arch Companies entity that owns 146 East 89th Street in Carnegie Hill. Arch Companies in 2022 bought the building for $5.8 million.
Simpson said in his affidavit that his income has been severely diminished since the start of the litigation.
“Since I was removed from my position of control of the Arch Companies, I have not had the substantial income that I previously enjoyed. I have been earning a small amount of income as the sole proprietor of a business restoring classic automobiles… What was once a hobby is currently my sole and substantially diminished source of income. The actions described above have destroyed my reputation as a real estate investor and developer that I had worked hard to achieve for more than 20 years. I have filed this chapter 11 case, because since my removal from control of the Arch Companies, I have been subjected to a substantial amount of litigation…”
The filings claims more than 200 creditors, assets up to $10 million and liabilities up to $50 million (although the list of creditors is significantly higher).
The Real Deal covered some of the dispute in a March 2024 article.
PincusCo reported previously on
• Jeffrey Simpson files bankruptcy for Arch Companies entity (March 11, 2024)
• $10.8M pre-foreclosure filed at Sheepshead Bay dev site (October 25, 2023)
• Investor fears $350M loss if Arch Companies files bankruptcy (October 11, 2023)
• Courts roundup: Arch Companies sues AB Capstone, Karten sues Schuster (February 21, 2023)