Bankruptcies: $5M in Bushwick, $6.3M for fee developer

1157 Myrtle Avenue (Credit - Cyclomedia)

1157 Myrtle Avenue (Credit - Cyclomedia)

A representative for the sprawling portfolio of All Year Management properties, filed to place the 10-unit residential buildings at 1157 Myrtle Avenue in Bushwick, Brooklyn, in bankruptcy protection on November 9, 2023, to block a foreclosure auction set for that day.
The notice of sale set the lien at approximately $5.96 million. The note holder pursuing the foreclosure case is Maverick Real Estate Partners, which bought the defaulted note in June 2021, as PincusCo reported at the time.
The walkup building with 10 residential units in Bushwick has 13,055 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 25 feet and is 76 feet deep with a total lot size of 3,494 square feet. The lot is irregular. The zoning is R6 which allows for up to 2.43 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $2 million. The most recent loan totaled 0.0 and was provided by Maverick Real Estate Partners on June 23, 2021.
The individual who filed the petition, Ephraim Diamond, is the associate restructuring officer for All Year Holdings, an affiliate of All Year Management.

Bankruptcy case link 1-23-44111-jmm

Affidavit Chapter 11

The president of Rise Development Partners, Lawrence Rafalovich, filed a petition November 10, 2023, seeking bankruptcy protection in order to stabilize and continue the business.

The firm claims assets of $1.7 million, mostly in accounts receivable, and liabilities mostly in the form of lawsuits, totaling $6.3 million.

The contractor-debtor does not claim any real estate as an asset. It claims a $300,000 liability on a case lease for the luxury automobile company Rolls Royce.

According to the filing, revenue has declined from $13 million in 2021, to $9.7 million in 2022 and now $6.7 million in 2023 through the filing date.

According to the petitioner’s affidavit, “The Debtor’s Chapter 11 filing was precipitated by, among other things, the financial distress caused after the separation with a former partner. Approximately five years ago, I partnered with [an individual] to establish a company known as Rise Concrete LLC (“Rise Concrete”). [The individual] also became a part-owner of the Debtor. Given [the individual]’s  expertise in concrete structure, forming this partnership would allow the Debtor to handle this critical aspect of construction in-house. However, due to issues obtaining the necessary insurance coverage for Rise Concrete, the Debtor and Rise Concrete were compelled to share resources and combine insurance policies, resulting in the Debtor being improperly named as a party in certain contracts (and therefore allegedly becoming responsible under those contracts).

“In or about June 2022, [the individual] abruptly left the partnership without notice. Thereafter, we negotiated a separation agreement to memorialize the split, with my retaining full ownership of the Debtor, and [the individual] of Rise Concrete. However, [the individual] eventually abandoned all Rise Concrete projects, without paying vendors and subcontractors for those projects. Those vendors and subcontractors then
turned to the Debtor seeking payment. As a result, multiple lawsuits have been commenced against the Debtor for obligations incurred as a result of [the individual]’s  failure to complete the projects of Rise Concrete (for work that the Debtor does not have the ability to perform). This left the Debtor allegedly responsible for the unfinished projects and outstanding payment obligations (the Debtor disputes this and reserves all rights herein), causing the Debtor significant financial distress. For this reason, the Debtor has sought the protections of Chapter 11 of the Bankruptcy Code.”

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

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