Isaac Hager entity puts Churchill’s Penn Plaza commercial building with $52M loan into bankruptcy

An affiliated company of Isaac Hager of Cornell Realty Management placed its 15 percent ownership stake in Churchill Real Estate’s new construction commercial building at 257-263 West 34th Street in Penn Plaza into bankruptcy, as he and Churchill battle a foreclosure action brought by Marathon Asset Management which through a fund provided a $52 million construction completion loan in 2019. The bankruptcy states Hager has put about $7.5 million in the project and that the building is largely vacant due to Covid, but “has a potential value equal to or in excess of mortgage debt of approximately $52 million.” Churchill is led by Justin Ehrlich and Sorabh Maheshwari.

The building received its initial temporary certificate of occupancy in October 2019. That loan allegedly fell into default and in September 2021 Marathon filed to foreclose on the debt through an action in New York state court. 655493/2021 Churchill, citing alleged issues with note transfers and jurisdiction — which Marathon vigorously disputes — had the case removed to a federal court, the U.S. District Court in Manhattan in March 2022. 1:22cv01991

Hager’s filing placed his entity Cornell West 34 Holder LLC into Chapter 11 bankruptcy, and that entity owns approximately 15 percent of the property-owning entity 257-263 W 34th Street LLC, which is controlled by Churchill. David Goldwasser of FIA Capital Partners was listed as chief restructuring officer of Hager’s LLC.

Hager filed the petition in U.S. District Court in Brooklyn, where Cornell is based. 1-22-41888-ess