1412 BROADWAY OWNERS FILE CH. 11
NEW YORK — After months of negotiations with mortgage holders broke off, 1412 Broadway Associates, the owner of a building containing a large number of garment center offices and showrooms, has filed papers seeking Chapter 11 protection.
A lawyer for the debtor said the partnership that owns the building was forced to file after a second mortgage holder, Lincoln Realty Capital Inc., started a foreclosure action and moved to have a receiver appointed.
“The building is worth $50 million, and New York Life Insurance Co. has a $64 million first mortgage, so I don’t know why Lincoln Realty moved to foreclose,” said Jeffrey L. Zivyak, of Zivyak, Klein & Liss, which is counsel to 1412 Broadway.
Zivyak said the building, at the northeast corner of 39th Street and Broadway, has been having cash flow problems for a while.
Court papers filed in Manhattan Bankruptcy Court list liabilities of $127 million, including the New York Life mortgage.
Zivyak said Lincoln Realty had obtained the appointment of a receiver after the Chapter 11 and, despite the receiver’s notifying tenants of his new role, he will be ousted by the filing and the current management will remain.
The building’s owners are a limited partnership, which includes Michael Kornblum, Peter J. Catalano, 1412 Claridge Co. LP and Broadway Claridge LP.
Included among the building’s tenants are The Leslie Fay Cos.’ dress and sportswear divisions, Escada USA and the Council of Fashion Designers of America.
— Fairchild News Service