Two Ostad brothers sue third to dissolve portfolio LLCs with $79.7M in debt

Brothers Michael and Edward Ostad, who own 10 properties with a third brother Steven Ostad, are asking the court to dissolve the partnership agreements that own the assets in part because they are worth less than their loans. In addition the two brothers seek the partitions because they allege Steven has incurred liabilities unrelated to Michael and Edward, but that the commonly owned assets are compelled to pay off.

The Ostads filed the action in State Supreme Court in Manhattan on April 14, 2025. Steven has not yet filed a response.
The three brothers, along with several trusts, own the properties with a total of about $79.7 million in debt, which are 1632 Madison Avenue, 2085 Lexington Avenue, 94-01 Roosevelt Avenue, 361 1st Avenue, 1065 Nelson Avenue, 3240 Third Avenue, 16-22 Avenue A, 609 West 151st Street, 629 West 135th Street and 941 Columbus Avenue. Most of the properties are owned one-third each, structured through agreements signed in 2018.

Michael and Edward are both medical doctors while Steven, according to his LinkedIn, is CEO of Real Quick Capital.
Court filings represent the positions of one party and are not necessarily accurate or complete.
Case LINK

The case was initially filed April 8, 2025,  but the judge declined to sign the order to show cause and the plaintiffs withdrew the action without prejudice on April 14, and then filed this action, which is essentially the same, the same day.

According to the complaint, “Upon information and belief, the value of the properties listed above (the “Properties”) is less than the amount currently owed on the mortgages encumbering the Properties… Michael and Edward are successful urologists…Michael and Edward are also successful real estate investors and property managers. Michael and Edward are Members and Co-Founders of Flatiron Realty Capital LLC, a real estate portfolio lender based in Manhattan. In addition, Michael and Edward are Members and Managers of Tristar Management, which is the Manager of the Properties owed by the Companies.”

The complaint continues, “Steven’s actions, and status as a Member of the Companies, have caused Michael, Edward and the Companies to expend significant sums of money to resolve outstanding legal obligations that Steven has incurred in his individual capacity… [this and the three-brother structures] have severely limited the Companies’ ability to renegotiate the mortgages on the Properties and otherwise do business with various financial institutions.”

The property

The elevator building at 1632 Madison Avenue with 59 residential units in East Harlem has 59,280 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 125 feet deep with a total lot size of 12,615 square feet. The zoning is R7-2 which allows for up to 3.44 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $9.7 million. The most recent loan totaled $15.8 million and was provided by Signature Bank on March 2, 2020.

Direct link to the property’s ACRIS page and link to DOB NOW portal.