Complex pre-foreclosure and bankruptcy at 429 Wythe Ave., at least $6M in legal disputes
By Adam Pincus
An entity that for less than one year owned the modest corner building with 5,460 square feet with four apartments and retail at 429 Wythe Avenue in Williamsburg filed for Chapter 11 bankruptcy protection yesterday in Brooklyn.
The individual who made the filing was Shmelka “Samuel” Guttman for the entity Revach Venture LLC. That company owned the property from August 15, 2019 to August 6, 2020.
In the filing, the company assets were listed as between $500,000 and $1 million, but the liabilities were listed as between $1 million and $10 million.
The building ownership has been complex, and two lenders filed suit this year to recover loans with original combined total of $5.4 million. In addition, several investors in the building signed a confession of judgment this year, which stated they owed an additional $621,226 related to the building.
The recent ownership transfers have been unusual and even before a group of investors acquired the building in 2016, there has been litigation surrounding it.
Since 2000, a nonprofit called Gen Help LLC owned the property, and on June 8, 2014, signed a contract with the entity Binyan Zion LLC to sell the property. At some point the seller sought to renege on the sale and Binyan Zion LLC sued in 2016 to enforce the sale, which went through for the price of $1.25 million on June 21, 2016. The buyer signatory was Joel Hirschfeld, “member.”
The sale, on June 21, 2016, included an unusual restrictive covenant: “The premises shall not be used as more than a four-family dwelling with a store of office or shall be used as office. “
A few days after the sale, Binyan Zion with the signatory Hershy “Herman” Meisels as “sole member” on July 1, 2016, executed a $2.6 million loan with lender L&L Capital Partners. The signatory for L&L was Jason Nagin.
In October 2017, L&L assigned the debt to Bethpage Federal Credit Union, which increased the debt to $4.2 million.
The financial problems became public in early 2020. In January, the entity Emunah Equities filed a confession of judgment valued at $500,000 that rose to $621,266 with interest.
Then in February, investor SN Funding sued Binyan Zion and others claiming it had invested $1.2 million in the company in exchange for a 49 percent stake. SN Funding believed by September 2019, it was the sole owner of Binyan.
But, according to SN Funding’s suit, it was not aware that a zero-dollar transfer had been executed, with Binyan selling to Revach Ventures on August 15, 2019.
In what appears to be a transfer to make SN Funding whole, on August 6, 2020, Revach Ventures transferred through a deed its interest in the property to SN Fundings’ SRNR Ventures.
Then Bethpage filed suit in July, 2020, 511845/2020 claiming Binyan stopped making payments in February 2020, which was the first default date, according to the complaint..
“The borrower is also in default due to an unauthorized transfer of the property, and the existence of liens and encumbrances in ciolaton of teh mortgage.” On June 9, 2020, Benthpage accelerated the loan, and on July 7, the bank made a demand for payment from Hershy Meisels, the loan guarantor.