Brooklyn Landlord All Year Bankruptcy Files
Just as it seemed poised to find a buyer to restructure most of its $ 1.6 billion debt, the huge Brooklyn development firm All Year Holdings filed for Chapter 11 bankruptcy.
The bankruptcy filing in Manhattan federal court on Tuesday came a day after the company discovered a $ 37.8 million judgment confession had been registered by Yoel Goldman, its troubled founder and sole proprietor, without approval by the board of directors. The All Year board of directors was also unable to come to an agreement with Goldman on its ability to make decisions for the company, which the record suggests could lead to insolvency.
The company has assets of $ 1.17 billion, according to the filing, including 69 business units and 1,648 residential units. It has approximately $ 1.6 billion outstanding, consisting of $ 800 million in bonds issued in Israel and approximately $ 760 million in mortgage debt.
All Year was close to finalizing an agreement to restructure most of its obligations with Israeli investors. Josh Gotlib’s Black Spruce Management made a bid this summer to take on the debt and take control of 125 All Year properties, but that deal fell through and a joint venture led by Andrew Farkas now appears to be the frontrunner.
Properties did not include the 900-unit All Year Denizen apartment complex in Bushwick or the William Vale Hotel in Williamsburg. All Year agreed to sell the Denizen complex to Atlas Capital for $ 506 million in September. The William Vale, meanwhile, is engaged in a legal battle with former Goldman partner Zelig Weiss.
“To drive further and ultimately complete a value-enhancing transaction, All Year launched a voluntary Chapter 11 proceeding on December 14 with the support of its bondholders,” according to a spokesperson for All Year.
The spokesperson said All Year had “sufficient liquidity to manage its ongoing operational needs and the needs of its subsidiary properties, including paying mortgages and related real estate expenses on a timely basis.”
The bankruptcy filing also revealed some key details about All Year’s portfolio and its deal with Goldman, which has become one of Brooklyn’s biggest owners by taking on cheap debt in the Israeli bond market.
An affidavit from All Year’s restructuring director revealed that Goldman remains the sole shareholder of the company.
After the company stopped paying interest to bondholders in late 2019, Goldman was making deals to repay debt he personally guaranteed, according to the affidavit. The company struck a deal to prevent Goldman from appointing new board members, and a restructuring executive and All Year’s board were left to make the decision.
The deal was due to expire next month, when the bondholders could have initiated “involuntary insolvency proceedings” in Israel over existing defaults, according to the affidavit. The company also discovered that Goldman had, without approval, issued an admission of judgment of $ 37.8 million to Taz Partners of Spring Valley, New York, on behalf of the company.
The company’s largest unsecured creditors are its bondholders. It also lists Downtown Capital Partners as an unsecured creditor for a $ 56.9 million preferred share guarantee and $ 3.6 million mezzanine loan guarantee. The company has about $ 4 million in cash to fund its operations, according to the affidavit.