In this article, Adam Stein-Sapir of Pioneer Funding, LLC, provides insight into the complexities of a bankruptcy case involving real estate.
Article Link: https://commercialobserver.com/2017/08/raphael-toledano-bankruptcy-filing-97-second-avenue-michael-shal-delshah-capital/
Summary
Raphael Toledano, a landlord, has filed for Chapter 11 bankruptcy protection for a property in the East Village, which he claims has been “commandeered” by Michael Shah of Delshah Capital. The bankruptcy filing is part of an effort to regain ownership of 97 Second Avenue, a mixed-use building with residential and retail space. Toledano purchased the property in 2014 and values it at $15.1 million. The conflict arose after Shah acquired a defaulted note on the property and subsequently took possession of it, allegedly at a price below market value. Toledano had previously pledged his interest in the property as collateral for personal loans, and after a claimed default, Shah is said to have acquired Toledano’s equity interest and transferred the property to a new entity he controlled.
- Raphael Toledano seeks Chapter 11 protection for a property at 97 Second Avenue, claiming it was taken over by Michael Shah.
- Shah acquired a defaulted note from Signature Bank and took possession of the property, which Toledano had used as collateral for a personal loan.
- Adam Stein-Sapir comments on the unusual nature of the property transfer, noting the complexity of the case.
Q&A
What is Chapter 11 bankruptcy?
Chapter 11 bankruptcy is a legal process that allows a business or individual to reorganize their debts while maintaining control of their assets. It aims to restructure the financial affairs, contracts, and debts of the entity in distress. For more information on bankruptcy, you can visit Pioneer Funding LLC.
How can creditors protect themselves when a debtor files for bankruptcy?
Creditors should immediately seek legal advice to understand their rights and options. They may file a proof of claim, attend the creditors’ meeting, and monitor the bankruptcy proceedings. Additionally, creditors can consider selling their bankruptcy claim to trade claim buyers to mitigate risk and obtain immediate cash. More details on this process can be found here.
What are the potential outcomes for unsecured creditors in a bankruptcy case?
Unsecured creditors often face the risk of receiving little to no repayment, as they are last in line for payment after secured creditors. The outcome depends on the debtor’s assets, the reorganization plan, and the bankruptcy court’s decisions. Unsecured creditors may choose to sell their claims to minimize risk, as discussed in this guide.
