From left: Assembly member Gary Pretlow, OTB at 42 West 48th Street, OTB at 2901 Avenue U and Newmark Knight Frank’s Paul Berkman

Like a bad day at the track, the losses have piled up quickly in the wake of the New York City Off Track Betting Corporation’s bankruptcy and closure. Landlords rarely receive much sympathy in New York City, but dozens will join nearly 1,000 newly unemployed workers and the state’s tax coffers as the big losers in the OTB debacle. The state-controlled corporation stopped paying rent in December with next to no warning. Landlords are waiting to get the keys back to their properties so they can troll for new tenants. [more]

Istithmar World, the former owner of the W New York Union Square hotel, filed suit yesterday to challenge a series of bankruptcy filings by a Philadelphia-based private equity fund that acquired the property in a December foreclosure auction. The suit comes just one week after LEM Mezzanine threw the property ownership into Chapter 11 bankruptcy protection to block DekaBank, a senior mezzanine lender, from holding another foreclosure auction. Isithmar asked a U.S. Bankruptcy Court judge in Delaware for an injunction that would prevent an affiliate of Philadelphia-based LEM from moving forward with a Chapter 11 bankruptcy it filed March 23. “In the weeks leading up to March 23, 2010, the date of the filing of the petition, LEM, through one or more of the individual defendants, engaged in a series of failed attempts to extort money out of DekaBank and Istithmar, in exchange for LEM’s agreement not to cause the voluntary bankruptcy filings by the Mezz 2 borrower, the Mezz 1 borrower or the hotel owner,” lawyers for Istithmar wrote in the complaint. [more]

Yair Levy and Park Columbus condominium at 101 West 87th Street on the corner of Columbus Avenue

Garrison Special Opportunities Fund, a Manhattan-based hedge fund, alleges that developer Yair Levy threw his stalled Park Columbus condominium project at 101 West 87th Street into Chapter 11 the night before a scheduled Sept. 10 auction to foreclose on a defaulted $20 million mezzanine loan, according to a U.S. Bankruptcy Court filing obtained by The Real Deal. On Sept. 8, Levy filed to get a temporary restraining order in New York State Supreme Court blocking the foreclosure auction. Garrison officials allege in the filing that Levy failed to come up with a $20 million deposit the following day as demanded by Judge James Yates, in order to block the sale. After failing to produce the deposit, the filing alleges that Levy threw his YL West 87th Street Holdings entity into Chapter 11 bankruptcy, one night before the scheduled Sept. 10 auction. Garrison officials called the bankruptcy filing “a sham” and urged a U.S. Bankruptcy Court Judge to lift an automatic “stay,” allowing it to move forward with the foreclosure auction, which would effectively sell the stalled project to a new owner. [more]