Judge protects Black Spruce quest to buy large All Year portfolio

A Manhattan State Supreme Court judge provided cover for Black Spruce Management’s effort to buy more than 100 Brooklyn multifamily properties owned by All Year Management by temporarily blocking any vote on a competing offer from Island Capital Group and Jesselson Capital. The temporary restraining order was issued Thursday, the same day that Josh Gotlib’s Black Spruce filed suit to halt All Year investors from voting on that competing plan.

The real estate firms are battling over one of the largest multifamily portfolios in Brooklyn at a time when pricing is uncertain but generally considered to have recovered from a severe drop in values due to Covid-19. Properties include 735 Bedford Avenue, 1002 Bedford Avenue and dozens of others.

All Year, formerly led by Yoel Goldman, and now under control of a restructuring agent, amassed the large portfolio over years, and began to raise capital by issuing debt on the Tel Aviv Stock Exchange. All Year began to experience financial struggles before Covid and in late 2018, the bonds were downgraded in part because of concern over the discovery that $3.7 million had been accidentally diverted to a private Goldman account. The bonds were delisted and earlier this year groups such as Black Spruce, Island Capital, Madison Capital, Meadow Partners and others submitted offers to recapitalize and take control of the properties.

Black Spruce won the round of bidders and was awarded a 30-day exclusivity and no-shop period, according to the complaint. The suit alleges the bondholder representatives breached that exclusivity period, and accepted an offer for review from Island Capital that appeared to mimic the Black Spruce offer, but then offerred additional inducements. That precipitated a review by the bondholder representatives and the scheduling of a vote to consider the proposal, which was set for November 18. The judge issued the TRO blocking that vote, according to court records.

Court LINK

–Adam Pincus