Courts roundup: West Village condo block with $11M in debts files for bankruptcy, 2 small foreclosures
Courts roundup for Monday, April 26, 2021: There was one bankruptcy and two small commercial foreclosures.
$11M bankruptcy for West Village condo block: The real estate property company founded by the late Serge Souto, Royal Blue Realty Holdings, which owns a block of residential condominium units and one commercial condominium unit at the mixed-use building 130 Barrow Street, in the West Village, filed for bankruptcy protection yesterday, citing assets between $1 million and $10 million and liabilities of $11.2 million. The condominium was created in approximately 1982, according to court records, in a building built in approximately 1930. The precise value of the assets was not specified in this filing.
Royal Blue is wholly owned by the Serge Souto Family LP, according to the chapter 11 petition, which was made in the U.S. Bankruptcy Court in Manhattan. The chief restructuring officer for the plaintiff is Andrew Nichols, and the attorney is Robert Rattet of Davidoff Hutcher & Citron. The family entity was spelled Serge Soto Family LP in the filing.
Nearly all the liability is an $11 million claim made by Deutsche Bank for a loan dating back to 2006, which Royal Blue lists as “disputed.”
Royal Blue, which was led by Serge J. Souto, who died in 2007, acquired the condo properties in 2002. The state court matter says Royal Blue bought a commercial condo unit in 2002 and converted it into 12 residential units. In city property records, one of the units is occasionally referred to as a commercial unit, while the rest are residential condo units.
Deutsche Bank filed to foreclose on nine loans totaling $8 million made on the individual condo units, in 2009, according to court records.
On March 3, 2021, a New York State Supreme Court Justice, Francis Kahn, granted a motion to appoint a receiver for rents in those 2009 cases, which are still ongoing. On April 12, Royal Blue filed an appeal of that decision.
In 2012, Royal Blue recorded a memorandum citing a 10-year lease set to expire in February 2022 for the 12 units, according to the memorandum of lease filed in 2012. The signatory for the lessee was Neil Dansker. It is unclear if that lease is still in force and is not mentioned in the bankruptcy filing.
$608K foreclosure filed on S. Richmond Hill mixed-use: Lender Wisdom Equities led by Armin Baratian, filed to foreclose on a loan with an original principal of $608,000 secured by a mixed-used building at 135-03 Liberty Avenue that has one retail unit and one residential unit. LINK
$350K foreclosure filed on Flushing resi condo: The trustee for Velocity Commercial Capital filed to foreclose on a commercial loan with an original principal of $350,000 secured by a residential condo unit at 134-40 Cherry Avenue in Flushing. LINK
— Adam Pincus