The Real Deal New York

Landlord for UES property tied to Chaim Miller files for bankruptcy

Building’s co-owner alleges he was one of Miller’s “early victims”

June 07, 2016 07:00AM
By Kyna Doles

261 East 78th Street in the Upper East Side

261 East 78th Street in the Upper East Side

Chaim Miller’s name is never far from a courtroom. This time, the Brooklyn-based investor is being sued by the owner of a distressed medical office building at 261 East 78th Street, who claims he was “victimized by a myriad of duplicitous actions” carried out by Miller and his partner Sam Sprei, who together allegedly moved to sell off the property’s membership interests.

“Unfortunately, I am one of their early victims,” Lee Moncho wrote in recent court documents. Moncho, through his entity 261 East 78 Lofts LLC, filed for Chapter 11 bankruptcy on Friday and is looking to sell the Upper East Side building, estimated to be worth at least $20 million. It’s the latest case involving Miller and Sprei, who have been sued at least 20 times over the last two years by former partners.

The property is also one of several buildings Miller purchased that was at the center of a bankruptcy case involving 45 John Street.

Moncho bought the property a decade ago, and as part of a prior bankruptcy settlement, formed a partnership with Miller in 2014 to co-own the building. As part of the settlement, Sprei, on behalf of Miller, agreed to replace Moncho’s debt with a new $10 million loan from Madison Realty Capital and provide $4 million in fresh capital, according to court papers. However, Moncho claims Miller never delivered on the new capital, and he claims he later discovered Miller had transferred a part of his majority membership interests to his partner Chun Peter Dong and took out an authorized loan.

Miller later agreed to place his membership interests in escrow while he satisfied the mortgage and settled with Dong, but Moncho claims “in typical fashion, Mr. Miller failed to comply with any of his commitments.” Moncho claims that because of the breach, Miller forfeited all of his ownership in the building and claims he is now the sole owner of the building.

According to court documents, Moncho owes creditors more than $14 million, including $10 million to Madison Realty and $1 million to Dong. The building is home to seven medical tenants and generates $1.2 million in annual rent, according to court documents.

Moncho couldn’t be reached for comment, nor could representatives for Miller.

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