The Real Deal New York

Company linked to Beninati files for bankruptcy in Connecticut

Developer is fighting foreclosure on Sutton Place condo project

September 02, 2016 04:00PM
By Katherine Clarke

Joseph Beninati

Joseph Beninati

A new bankruptcy filing logged in Connecticut may provide a window into just how cash-strapped embattled developer Joseph Beninati has truly become.

A Connecticut entity linked to Beninati and his wife Rhonda Beninati has filed for Chapter 11 bankruptcy protection, citing liabilities between $500,000 and $1 million, according to the filing.

The entity, Persistence Partners IV LLC, of which both Rhonda is listed as the sole shareholder and Joseph as manager, lists its creditors as its accountants, to whom it owes just $16,000, and a tax collector.

Beninati did not respond to several requests for comment.

While the filing does not equate to a personal bankruptcy, it makes clear that he has major financial troubles.

The developer is currently fighting foreclosure on his condominium project at 3 Sutton Place in Midtown East and recently sued his mezzanine lender Gamma Real Estate in federal bankruptcy court for at least $100 million in damages, alleging that Gamma’s principal N. Richard Kalikow conspired to take control of the property. Beninati borrowed $147 million with 30 percent interest from Gamma in the form of a mezzanine loan for the acquisition and pre-development of the project, but defaulted on the loan in January, ultimately filing for bankruptcy protection there too. According to a Crain’s article, Beninati invested just $5 million into the Sutton Place project.

The Bauhouse Group head is also being sued by commercial brokerage giant JLL, which says he has refused to pay its $1.9 million commission for arranging the financing on the Sutton Place deal.

Meanwhile, Beninati pulled his Greenwich mansion off the market last month after listing it on and off for the past four years, Zillow shows. In the past year alone, he’s dropped the price three times, bringing it most recently to $18.8 million, down from $26.08 million in 2015.

But liquidity doesn’t appear to be Beninati’s only problem, either.

In a recent court filing tied to a lawsuit brought against the developer by boutique brokerage boss Nathaniel Christian in 2014, Christian alleged that Beninati is also under investigation by the District Attorney’s office. A spokesperson for the DA’s declined to confirm that an investigation was pending.

Christian alleged Beninati and several of his partners interfered with his photo and video-sharing app Picshare and refused to pay him his commission on a deal he put together for the group in Chelsea, at 515 West 29th Street.