The Real Deal New York


Menachem Stark’s lenders fear for their money: court filings

January 09, 2014 11:28AM
By Adam Pincus

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100-Stark

100 South 4th Street in Williamsburg (Photo credit: PropertyShark) and Menachem Stark (Photo credit: Eli Wohl)

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.

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