A subsidiary of lender Deutsche Bank, acting as a trustee for a defaulted $29 million loan on Menachem Stark’s 74-unit Williamsburg rental property at 100 South 4th Street, is concerned about possible unauthorized use of funds in the building’s bank account, U.S. Bankruptcy Court records filed yesterday show.
An attorney for German American Capital, the Deutsche Bank subsidiary, filed an application for “interim emergency relief,” in Manhattan bankruptcy court seeking to compel Stark’s attorney to provide updated records from the building’s checking account at Capital One Bank.
Stark, a developer and landlord in Brooklyn, had not been in compliance with the required disclosures when he was found murdered in Great Neck on Long Island on Jan. 4. The case is under investigation with law enforcement sources reportedly looking at a Stark business partner as a possible suspect.
The last accounting for the building was filed in October for the 30 days ending ending Sept. 5, and showed about $1.4 million in the account, a review of court records shows.
Stark was supposed to file a report on the 20th of each month, for the prior month, German American said in its filing. It was not clear why the most recent reports had not been submitted. He and his partner Israel Perlmutter filed for Chapter 11 bankruptcy protection in 2009 to stave of a foreclosure action on the property, and this application is part of that ongoing case.
Stark’s attorney and German American did not immediately respond to a request for comment.
Stark was in control of the property as a so-called debtor-in-possession, which meant he managed the property while the bankruptcy case continued.
“[German American] is understandably concerned about its collateral, including the [debtor-in-possession] account funds it expects to be in the approximate amount of $2 million,” the filings said, noting that Stark was reportedly in “financial dire straits,” when he was kidnapped prior to his murder.
“[German American] seeks to immediately confirm that the account contains all of its cash collateral and that no unauthorized withdrawals were made.”
On Sunday, German American reached out to Stark’s attorney Leo Fox, who said he would provide an accounting on Monday, the court papers said, but because of the mourning period he was not able to provide the information.