It’s been a mad rush for Brooklyn owner Chaskiel Strulovich.
The beleaguered landlord placed his portfolio of 31 rental units in Chapter 11 two years ago in Westchester County to thwart foreclosure by hardline lender Maverick Real Estate Partners. Strulovich and his partners have also been accused by investors of defrauding them “like Bernie Madoff”. Strulovich’s legal team denied the allegations.
Now Strulovich has secured exit funding to pull the majority of his portfolio out of bankruptcy.
Strulovitch recently completed a $ 13.9 million one-year refinancing with New York-based Maguire Capital for eight properties in the portfolio, according to a person familiar with the matter. It comes months after Strulovich secured a $ 16.5 million loan from Maguire for 10 buildings in Williamsburg and Carroll Gardens.
The remaining 13 buildings will go up for auction this week, according to New York Southern District Bankruptcy Court records.
Although the loan from Maguire, led by Marvin Azrak, brought eight properties out of bankruptcy, the bailout financing did not come cheap.
The loan, which covers 36 residential units and one commercial unit, has an interest rate of LIBOR plus 10.42% with a floor of 10.50% per annum. On top of that, there is a 2% creation fee and 1% exit fee, according to a court file in October. Time is running out now for Strulovich to find a lender to replace this loan when it expires.
The properties are mostly small apartment buildings across Brooklyn. They include 55 Stanhope Street in Bushwick; 106 Kingston Avenue, 119 Rogers Avenue and 127 Rogers Avenue in Crown Heights; 167 Hart Street in Bedford-Stuyvesant; and 107 South 3rd Street, 109 South 3rd Street and 129 South 2nd Street in Williamsburg.
Strulovich’s legal troubles date back to 2017.
That year, Maverick Real Estate Partners purchased $ 40 million in loans related to Strulovitch’s 31-building portfolio from Signature Bank. Maverick initiated the foreclosure within six months, alleging that the owner was in default in part because Strulovich had not disclosed true ownership of the properties. Strulovich had hidden Joshua Wagschal’s property to protect Wagschal from creditors, Maverick argued.
Around the same time, a group of Israeli investors alleged that Strulovich and his partners had defrauded them of $ 20 million as part of a Madoff-style scheme. They said they invested in 20 properties owned in co-ownership by Strulovich and his business partners, who then illegally borrowed against those assets several times their value to purchase additional properties.
This case is currently pending arbitration.
In 2019, companies linked to the Strulovich properties filed for bankruptcy. Instead of filing a lawsuit in Brooklyn where the buildings are located, Strulovitch took his case to Westchester County Federal Judge Robert Drain, who some see as debtor-friendly and who recently approved Purdue’s Chapter 11 bankruptcy. Pharma. Strulovitch also brought in David Goldwasser, a bankruptcy specialist based in Boca Raton, as the head of the restructuring.
In early 2021, Drain ruled that Maverick inappropriately accelerated loan repayments on Brooklyn’s apartment portfolio. This ended the foreclosure action and allowed Strulovich to restructure some of his debt. Maverick is appealing the decision.
The remaining properties are auctioned Jan. 6 by Greg Corbin, President of Bankruptcy and Restructuring at Rosewood Realty Group. The minimum opening bid for all properties is $ 17.4 million, according to a court record.
Lawyers for Maverick and Maguire Capital’s Azrak could not be reached for comment. Strulovtich’s lawyer did not return a request for comment.