Home News Eli Karp’s Hello Living Again Risks Losing Flatbush Project

Eli Karp’s Hello Living Again Risks Losing Flatbush Project

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Eli Karp of Hello Living, Jeff Simpson of Arch Companies and 1580 Nostrand Avenue (Hello Living)

Eli Karp has launched a scorched earth tactic against Madison Realty Capital for attempting to seize his prized Flatbush apartment complex. Now he could have a new enemy.

According to marketing materials, Arch Companies will purchase senior and mezzanine loans from Madison Realty and plans to sell UCC’s foreclosure of Karp’s Hello Living-owned real estate interest.

Leading the way in sales Greg Corbin, a bankruptcy and foreclosure expert at Rosewood Realty, is set for Sept. 21. The lot at 1580 Nostrand Avenue includes a completed 93-unit building and an unfinished development site.

Successful UCC sale could end one of the hottest Brooklyn properties Fight in recent memory.

Brooklyn developer Karp bought the location for $13 million in 2014, betting it would become one of the borough’s next up-and-coming neighborhoods.

However, he soon ran into trouble, with his lender claiming he had defaulted on the loan. When Karp’s real estate portfolio began to collapse, his one lender in particular drew his ire: Josh Zegen’s madison real estate.

Karp filed a rambling lawsuit in the New York Supreme Court last summer, calling Madison Realty a “pirate” who “fabricated a default” to claim a 24% interest rate.Then suddenly a website depicting Szegen appeared as a cartoon villain Use the vacuum cleaner to suck the money out of the Carp building.

Madison’s attorneys argued that when Karp voluntarily agreed to assume the mezzanine debt and he failed to meet the terms, Madison took action.

“The exercise of these rights and remedies is not ‘planned,’ ‘bad faith,’ or ‘fraud.’ It is merely an exercise of the lender’s contractual rights,” Madison’s attorney said in court. .

A judge ruled in favor of Madison Realty’s motion to dismiss the lawsuit.

Carp stopped the foreclosure in December by bankrupting the project’s corporate entity. Arch Companies then purchased his $6 million mezzanine loan and his $73 million senior loan from Madison Realty in March. In July, a judge dismissed the bankruptcy suit.

But the drama didn’t end there. In August, Arch Companies sued his Karp and initiated another foreclosure on the property. In that lawsuit, Arch alleges that the project’s owner entity improperly entered into a master lease with the tenant and deferred rent payments for several months. Attorneys for Arch Companies argue that the lease could make him ineligible for the 421a tax deduction.

“Simply put, the tenant and the main tenant conspired to steal the security deposit and rent while the foreclosure was pending,” Arch’s lawsuit alleges.

Karp’s attorneys said the lender knew about the master lease several months earlier.

“In its motion to dismiss the Chapter 11 action, plaintiffs specifically discussed a master lease,” Karp’s attorneys wrote in court documents.

Karp is unlikely to manage Flatbush’s assets any longer. However, there is no guarantee that Arch Companies will initiate a foreclosure.

“We’re pitching UCC foreclosures, or LLC memberships, but we’ve had quite a few offers for both parts of the debt,” Corbyn said. “If someone bought both parts of the capital stack, they would be stepping into Arch’s shoes on the road to owning the asset itself.”

The September 21st auction will be conducted by Matthew Mannion of Mannion Auctions.

New York-based Arch Companies, led by Jeff Simpson, has a real estate portfolio of more than $1 billion and manages more than 5,000 multifamily homes, according to its website.

Neither his attorney, Eli Karp, nor Arch Companies declined to comment. Madison Realty declined to comment.

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