Nussbaum Lowinger files for Chapter 11 bankruptcy protection
Nussbaum Lowinger LLP, the shuttered Manhattan law firm, filed for Chapter 11 bankruptcy protection in the Southern District of New York on April 16, 2026. The filing, which marks a formal shift from a previous state-level wind-down attempt to federal oversight, follows two years of escalating legal turmoil involving allegations of escrow misappropriation and financial impropriety. Bloomberg first reported the bankruptcy filing, which effectively centralizes a litany of civil claims and criminal fallout that have dogged the firm’s principal since early 2024.
Case 26-22383 LINK
Ch 11 doc Doc 5 affidavit Nussbaum Lowinger LLP
Nussbaum Lowinger LLP creditors
| wdt_ID | wdt_created_by | wdt_created_at | wdt_last_edited_by | wdt_last_edited_at | Name of creditor and complete mailing address | Creditor Address | Indicate if claim is contingent, unliquidated, or disputed | Unsecured Claim |
|---|---|---|---|---|---|---|---|---|
| 1 | acris | 04/17/2026 06:12 AM | acris | 04/17/2026 06:12 AM | Elizabeth Capital Success LLC | 5 Grand Central East, New York NY 10017 | Contingent, Unliquidated, Disputed | 156,380,000 |
| 2 | acris | 04/17/2026 06:12 AM | acris | 04/17/2026 06:12 AM | Blueberry Funding LLC | 695 Cross Street, Suite 281 Lakewood NJ 08701 | Contingent, Unliquidated, Disputed | 58,772,945 |
| 3 | acris | 04/17/2026 06:12 AM | acris | 04/17/2026 06:12 AM | EADMK LLC | 1420 W. 21st Street, Miami Beach FL 33140 | Contingent, Unliquidated, Disputed | 27,500,000 |
| 4 | acris | 04/17/2026 06:12 AM | acris | 04/17/2026 06:12 AM | Howard Hershkowitz | 102 Woodmere Blvd., Woodmere NY 11598-2128 | Contingent, Unliquidated, Disputed | 20,500,000 |
| 5 | acris | 04/17/2026 06:12 AM | acris | 04/17/2026 06:12 AM | Crestview 360 Holdings LLC | c/o Andrew L. Buck, Esq. 599 Lexington Avenue New York NY 10022 | Contingent, Unliquidated, Disputed | 15,000,000 |
| 6 | acris | 04/17/2026 06:12 AM | acris | 04/17/2026 06:12 AM | 529 Maple LLC | 410 Troy Avenue, Brooklyn NY 11213 | Contingent, Unliquidated, Disputed | 10,000,000 |
| 7 | acris | 04/17/2026 06:12 AM | acris | 04/17/2026 06:12 AM | Murray Huberfeld | 15 Manor Lane, Lawrence NY 11559-1503 | Contingent, Unliquidated, Disputed | 10,000,000 |
| 8 | acris | 04/17/2026 06:12 AM | acris | 04/17/2026 06:12 AM | Stub World Inc. | 26 Firemans Memorial Drive, Pomona NY 10970 | Contingent, Unliquidated, Disputed | 8,526,500 |
| 9 | acris | 04/17/2026 06:12 AM | acris | 04/17/2026 06:12 AM | Isidore Bleier | 40 Turin Avenue, Lakewood NJ 08701-5468 | Contingent, Unliquidated, Disputed | 7,500,000 |
| 10 | acris | 04/17/2026 06:12 AM | acris | 04/17/2026 06:12 AM | Strategic Funding | 15 Manor Lane, Lawrence NY 11559-1503 | Contingent, Unliquidated, Disputed | 7,000,000 |
| Name of creditor and complete mailing address | Creditor Address | Indicate if claim is contingent, unliquidated, or disputed | Unsecured Claim |
The voluntary petition indicates that the firm is grappling with estimated liabilities between $100 million and $500 million, while holding estimated assets of only $10 million to $50 million.
In a declaration submitted alongside the petition, Ephraim Diamond, the firm’s Chief Restructuring Officer and founder of Arbel Capital Partners LLC, detailed the systemic failures that led to the collapse. Diamond noted that while the firm was ostensibly a transactional real estate practice, it had branched into “hard money lending, liquidity enhancement loans, and short-term bridge loans.”
This shadow banking operation allegedly relied on funds deposited into the firm’s escrow accounts, with providers promised substantial returns. According to the filing, the collapse began in late 2022 when these funds were increasingly used to support a single, unnamed client who was ultimately unable to repay the capital, leading to the depletion of client escrow accounts.
The bankruptcy filing lists a staggering array of unsecured claims, many of which are marked as contingent, unliquidated, or disputed. Among the top five creditors identified in the Chapter 11 documents are Elizabeth Capital Holdings LLC at $156.4 million, Blueberry Success LLC with a claim of $58.7 million, EADMK LLC at $27.5 million, Howard Hershkowitz at $20.5 million, and 529 Maple LLC at $10 million. These figures underscore the magnitude of the financial hole left by the firm’s defunct operations. The filing also notes an affiliate bankruptcy for Mark J. Nussbaum and Associates, PLLC, the predecessor entity through which founding partner Mark Nussbaum initially built his practice.
The firm’s rapid decline was first punctuated by the January 2024 suicide of Mendy Steiner, a prominent real estate investor and a key client of the firm. The Real Deal reported on the initial escrow disputes that surfaced immediately following Steiner’s death, providing the first public glimpse into the missing millions. As the scandal widened, The Promote was the first to report on allegations from a Brooklyn lawsuit suggesting that Mark Nussbaum had misappropriated $15 million in escrow funds—originally belonging to investor Jacob Sod—to pay alleged “hush money” to Wolf “Volvi” Wercberger in an attempt to keep further financial irregularities from reaching the authorities.
Prior to the Chapter 11 filing, the firm had attempted to wind down via an Assignment for the Benefit of Creditors (ABC) in New York State Court in June 2025, under index number 157933/2025. However, Diamond’s affidavit makes clear that the ABC process had “effectively stalled,” with minimal progress made in recovering assets or resolving the multitude of pending lawsuits. The move to Chapter 11 is intended to provide a “speedier resolution” and a centralized forum to adjudicate the complex web of fraudulent transfer and malpractice claims currently pending in various New York Supreme Courts. Diamond’s declaration emphasizes that the federal bankruptcy court is better equipped to handle the “extensive jurisprudence” required to untangle the firm’s pre-petition conduct and maximize value for a creditor body that includes high-profile nursing home moguls and hard-money lenders.
Mark Nussbaum was indicted by the Manhattan District Attorney in May 2025 on charges of first-degree grand larceny, and entered a not guilty plea.
The bankruptcy documents reveal that the firm’s books and records are currently located at Nussbaum’s personal residence in Suffern, New York. As the Chapter 11 process moves forward, the focus will shift to “clawback” litigation as the estate seeks to recover funds distributed during the firm’s final months.