Bankruptcy filed for Chelsea dev site affiliated with late developer Brandon Miller

A stakeholder in a Chelsea development site recently reacquired by the late real estate investor Brandon Miller of Real Estate Equities Corp., signed a petition to place the property at 118 10th Avenue into chapter 11 bankruptcy protection last week, just over a week after Miller died.

The stakeholder, Douglas Teitelbaum as manager of an entity called DIA Family Holdings LLC, claims that entity is a payee of the property owner Highline 118 LLC, and because of an alleged default, Teitelbaum has directed Highline 118 LLC to file for bankruptcy. Teitelbaum made the filing in the Southern District of the U.S. Bankruptcy Court on July 11, 2024, through number 24-11218-pb. The initial chapter 11 filing has few details. (118 10th Avenue pdf) Miller died on July 3, 2024, according to news reports.

PincusCo could not find records of the company DIA Family Holdings LLC registered in New York State or in another state as of publication date.

It was not immediately clear how Miller reacquired control of Highline 118 LLC. Miller’s Real Estate Equities Corp. sold the leasehold that controlled the property to GDS Development and the Swedish developer Klovern, in 2019, valued at $22.3 million. At that time, GDS borrowed $13.25 million, secured by the site. In 2019, GDS filed plans for a six-story, 80,600-square-foot office building. No construction has begun, with Yimby reporting in November 2023 on the lack of activity.

The bankruptcy filings says DIA Family Holdings LLC on December 11, 2023, signed a pledge and security agreement, which describes DIA Family Holdings LLC as the payee, and as such following a default can take control of Highline 118 LLC. Then on December 22, 2023, GDS released the development parcel from the $13.25 million loan. On the same day, Klovern in care of Swedish development firm Corem Property Group, assigned ownership to Brandon Miller through a $1 entity-level transaction. On July 11, 2024, DIA exercised its right and placed the entity in bankruptcy.

In a 2020 offering of shares, Klovern valued the 118 Tenth parcel at $82 million, and said in partnership with GDS it expected to develop a boutique Class A office building.  GDS had included the 118 10th Avenue project on its website as late as December 2023, but it is no longer there.

Direct link to Acris document. link