After a yearlong deadlock that saw its property on the verge of financial ruin, the sponsor of a six-unit condo at 40 East 72nd Street is officially bankrupt.
Axia Realty LLC filed for Chapter 11 bankruptcy protection on Monday, with 50 percent equity owner Antonia Milonas acting as sole manager. The owner of the other 50 percent, Antonia’s husband Spiros Milonas, was “judicially declared unable to manage his own affairs” in August under the Mental Hygiene Law, according to court filings.
Antonia’s ability to manage the LLC’s finances is still constrained, however, due to a long-running family feud involving Spiros’ $500 million shipping, oil, gas and real estate empire.
“I am not in possession or control of [Axia’s] books and records as my husband’s daughters from a prior marriage have wrongfully hijacked [its] operations, have withheld financial information regarding [its] operations from me and have been systematically manipulating [Axia] for their own benefit,” she wrote in an affidavit.
Axia still owns three of the project’s unsold residential units and an office unit, which had a total estimated value of $45 million prior to the pandemic. Antonia and Spiros themselves reside in the building’s penthouse unit, which is valued at $23 million, according to court filings.
Through the Chapter 11 process, Antonia Milonas intends to recover over $4 million that she claims Spiros’ daughters improperly funneled to the family’s shipping business, Ionian Management, and to overturn a 2018 judgment according to which Axia owes an Ionian affiliate $2.2 million in connection with the development of the condo project.
The buyers of the building’s three other units sued Axia last year, seeking to take control of the condo board and fend off “complete chaos” in its operations. The unit owners’ demand was granted in part, but with the caveat that decisions related to financing still required a supermajority.
That still wasn’t enough to turn things around: Last October, the building manager informed the unit owners in an email that the condo was “officially out of money.” Some building staff had already walked off, while the ones who stayed had been taking their meals on a chair in a rat-infested basement, according to condo board meeting transcripts.
Representatives for Axia, the condo unit owners and the condo board did not respond to requests for comment.
In addition to the millions of dollars in dispute with Ionian Management, Axia owes about $400,000 in common charges and $500,000 in real estate taxes, according to court filings. A teleconference with creditors has been scheduled for Dec. 3.