July 16th, 2021, by Adam Pincus
An affiliate of lender Be-Aviv, which provided Toby Moskovits and Heritage Equity Partners $8 million to finance a 2019 purchase of a development parcel in the Bronx, asserted the loan was in default and purported to assign itself control of the parcel, then filed to place it into bankruptcy, according to a petition filed in the U.S. Bankruptcy Court in Manhattan yesterday.
Heritage, led by Moskovits and Michael Lichtenstein, purchased the parcel at 286 Rider Avenue in Mott Haven in September 2019 for $10 million, financed with an $8 million loan from Be-Aviv, the U.S. affiliate of the Israeli firm Aviv Group.
The bankruptcy filing is related to pending litigation filed in Brooklyn in March in which Be-Aviv is a defendant. In that case, Heritage sued Be-Aviv for specific performance on the funding of construction loans on 875 4th Avenue in Brooklyn and 286 Rider Avenue in the Bronx. In its lawsuit Heritage outlined a two-deal commitment provided to it by Be-Aviv’s principals Ben Harlev and Eyal Epstein. In early March 2020 at a scheduled closing involving city agencies documents were executed and Be-Aviv failed to fund, according to papers filed by Heritage. There is a pending hearing on a default judgment against the lender for failure to respond on a lawsuit naming them for failure to fund 286 Rider and 875 4th Avenue, according to court records.
Be-Aviv, according to court filings, did not respond to that lawsuit in a timely manner and there is now a motion pending for a default judgment against them.
According to a source familiar with Heritage’s position in the litigation, “The bankruptcy filing is the latest attempt at legal maneuvering by Be-Aviv who as lender is lacking authority to simply announce that they own the shares of an entity without going through the legal process of foreclosure.”
Be-Aviv declared the loan due on March 1, 2021, and notified Heritage of that, the bankruptcy filing says. Then on April 27, it sent another note declaring a default since the loan had not been repaid, and asserting it had complete control of the asset. The bankruptcy filing says, “Lender assigned, transferred, and registered, as applicable, all membership and equity interest of the debtor to and in the name of lender [Be-Aviv] as if lender were the absolute owner.”
Be-Aviv hired Rosewood Realty Group to market the property, the filing said. Greg Corbin leads the brokerage firm’s bankruptcy and restructuring group.
In the ongoing legal dispute, Heritage alleged in a complaint that Be-Aviv did not fund a $42 million construction loan for the development that it had agreed to fund. PincusCo reported on that case at the time.
UPDATED: With broker information that was included in the filing.
Direct link to Acris document. link
Correction: A prior version of this article said the Brooklyn state case suit was filed in February 2021, when in fact it was filed in March 2021.