Courts roundup: Suit over $48M Brooklyn sale, $10M Bronx auction, $60M East Village pre-foreclosure

Buyers of $48M 57 Willoughby building sue seller: Prosper Property Group, Zuccarello Zerillo & Company and GRA Equities, which partnered to pay $48 million for 57 Willoughby Street in Downtown Brooklyn, filed a suit March 14, 2025 in New York State Supreme Court in Brooklyn, against the seller, Meadow Partners. The specifics of the case were not available as of publication. The attorney who filed the case for the plaintiffs placed the documents under a “temporarily restricted” status, citing confidential information. The case was filed under the case type Commercial – Other (declaratory judgment). Declaratory judgments are typically sought, in the context of a property sale such as this, to clarify terms of the sale contract.
Direct link to the property’s ACRIS page

$10M Bronx multifamily foreclosure auction scheduled: A referee set April 7, 2025, as the date for the foreclosure auction for a loan with an original principal of $10 million secured by a  61-unit rental building at 2710 Morris Avenue owned by an affiliate of Douglas Peterson’s City Skyline Realty. The notice of sale was signed March 7, 2025, by referee Barry Salman. The total judgment was set at just over $12 million. The case, 808950/2023E, was filed June 9, 2023 in the Bronx, as PincusCo reported at the time. The original plaintiff was Peapack-Gladstone Bank, now know as Peapack Private Bank & Trust, but that lender sold the loan June 28, 2024, to an affiliate of Allegiance Financial Group, MMG Investments IV, LLC.

The elevator building with 61 residential units in Fordham Manor has 85,956 square feet of built space and 15,717 square feet of additional air rights for a total buildable of 101,738 square feet according to a PincusCo analysis of city data. The parcel has frontage of 150 feet and is 115 feet deep with a total lot size of 16,900 square feet. The zoning is R8 which allows for up to 6.02 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $2.8 million. The most recent loan totaled $10 million and was provided by Peapack-Gladstone Bank on July 30, 2021.
Direct link to the property’s ACRIS page

$60M pre-foreclosure filed at Madison Realty Capital East Village portfolio: Community Preservation Corporation, Neighborhood Restore HDFC and Related Fund Management, which purchased a stake in a loan portfolio of rent-regulated properties following the collapse of Signature Bank, filed a pre-foreclosure action alleging a default in a loan with an unpaid principal of $60 million that was provided to an affiliate of Madison Realty Capital. The loan is secured by 27 St. Marks Place, 66 East 7th Street, 514 East 12th Street, 510 East 12th Street, 334 East 9th Street, 329 East 12th Street, 327 East 12th Street, 323-325 East 12th Street, 253 East 10th Street, 235 East 5th Street, 233 East 5th Street, 231 East 5th Street, 229 East 5th Street, 228 East 6th Street and 223 East 5th Street. The Real Deal reported on this pre-foreclosure previously.
According to the complaint, “Borrowers defaulted under the terms of the Loan Documents by failing to make installment payments when due in February 2024 and continuing thereafter. All applicable grace periods have expired or lapsed… On information and belief, Borrowers continue to collect Rents from tenants of the Mortgaged Property, and each of the Obligors has breached and defaulted under their contractual obligations by failing to turn over said rents or to hold same in trust for Plaintiff, as directed in the Default Notice. Unpaid Principal: $60,000,000.00 Accrued and Unpaid Interest: $3,733,250.83 Late Charges through 10/1/2024: $218,522.78 Default Interest through 10/31/2024: $12,200,000.00 Total Indebtedness: $76,151,773.61.”
Direct link to the property’s ACRIS page