Toledano to Shah: “I will bury you, literally. I will bury this building”

The landlords are in a battle over sale of distressed Second Avenue property

New York /
Sep.September 13, 2017 03:20 PM

In an ongoing tussle over an 11-unit building on Second Avenue, Raphael Toledano filed a complaint in Bankruptcy Court Tuesday in an effort to void its sale to Michael Shah’s Delshah Capital.

Both landlords claim managing rights to the owning entity of the building at 97 Second Avenue, which was foreclosed on earlier this year.

Toledano lost control of the property when he defaulted on a $2 million loan from Brian Lefkowitz’s Lefko Funding, for which it served as collateral.

In April, Lefkowtiz sold the membership interest in the owning entity, 97 2nd LLC, for $9.1 million to an LLC he controlled. Then, in July, Shah acquired a $9.5 million note on the property from Signature Bank.

At this point, the stories diverge. According to Shah, and documents filed with the city, Lefkowitz transferred the ownership to Shah, putting him in control of the property. According to Toledano, Lefkowitz had given him managing rights for a 75-day period beginning in June, until the sale was finalized. Shah denies knowing of any such agreement until recently, and challenges its validity.

In August, during the 75-day period, Toledano filed for Chapter 11 bankruptcy protection on the property and tried to procure a buyer. According to court documents filed by Shah, Toledano also used that time to threaten and extort him. Toledano threatened to instruct the tenants to withhold rent, according to the documents, and told Shah, “I will bury you, literally. I will bury this building and make sure of it.”

Earlier this week, Shah filed a to dismiss the bankruptcy case, claiming that Toledano had no rights to the property at the time he filed it.

In response to the motion to dismiss, Toledano filed the new complaint claiming that Shah bought the property knowing that Toledano was challenging the the Lefkowitz foreclosure, and that the transfer to Shah should be voided.

Toledano declined to comment for this story. A spokesperson for Shah said that Toledano had been foreclosed on by his own lender and is “merely engaging in judicial harassment.”

The 27-year-old landlord is awaiting approval for the sale of the deeds of 15 distressed East Village properties to lender Madison Realty Capital, which recently replaced him as property manager on the buildings.


Related Articles

arrow_forward_ios
Before the pandemic, national tenants paid 94 percent of rent. (Getty)

Retail rent collections rebound to 90%

Retail rent collections rebound to 90%
Cindat Capital Management CEO Greg Peng and Hersha Hospitality Trust CEO Jay Shah with 51 Nassau Street (Google Maps)

7 Manhattan hotels head to auction block

7 Manhattan hotels head to auction block
As companies leave Silicon Valley, Austin, Texas is becoming a top destination. (Getty)

Silicon Valley exodus: Where’d everyone go?

Silicon Valley exodus: Where’d everyone go?
TF Cornerstone President Frederick Elghanayan with 2-10 54th Avenue and 55-01 Second Street in Long Island City (Google Maps)

The 10 biggest new project filings in NYC

The 10 biggest new project filings in NYC
Gov. Andrew Cuomo announced that a major development surrounding Penn Station. (Getty)

Cuomo adds housing to $51B Midtown West project

Cuomo adds housing to $51B Midtown West project
Alex Sapir (Getty)

Former Sapir employee accuses company of retaliation

Former Sapir employee accuses company of retaliation
229 West 43rd Street in New York and Two Westlake Park in Texas. New York and Texas are the states with the largest exposure to loans with appraisal reductions. (Photos via iStock; Google Maps; JLL)

What appraisal reductions mean for future losses on CMBS loans

What appraisal reductions mean for future losses on CMBS loans
Cushman & Wakefield CEO Brett White, Mayor Bill de Blasio, and Donald Trump, Eric Trump and Donald Trump Jr. (Getty)

Cushman & Wakefield, NYC cut ties to Trump Organization

Cushman & Wakefield, NYC cut ties to Trump Organization
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...