Nightmare for once-ascendant Brooklyn condo developer

Developer Rafi Manor seeks bankruptcy as projects' lender sues

New York /
Jul.July 22, 2021 11:15 AM
Nightmare for once-ascendant Brooklyn condo developer

Manor is facing foreclosure actions on four Brooklyn properties he helped develop, including 135 Bayard Street (Google Maps)

UPDATED August 4, 2021 at 1:40 p.m.: Just three years ago, Rafi Manor’s M Development was a leading developer in Brooklyn with 12 active projects, including the largest condo project filed in Brooklyn in 2019, which has since landed with another firm.

Now, Manor is facing foreclosure actions on four Brooklyn properties he helped develop: 135 Bayard Street, 517 Brooklyn Avenue, 744 Lefferts Avenue and 52 Herbert Street.

Last year, lender Realya Investments sued Manor and an LLC tied to his firm for defaulting on acquisition loans at 54 Dupont Street in Greenpoint. Realya also sued Manor for allegedly breaching a loan agreement at 517 Brooklyn Avenue in Crown Heights.

Manor and the LLC, M1 Development, argued that they were only listed as guarantors on the loan, and were not parties to the loan agreement. The court disagreed, ordering Manor and M1 to pay about $1.6 million plus interest at a rate of $512.33 per day.

A few months later, Manor and M1 filed for bankruptcy to satisfy their debts and reorganize. According to court documents, liabilities for M1 Development total $2.72 million, but it only has about $357,000 in assets from an ownership interest in several LLCs. Manor’s personal liabilities total approximately $6.2 million.

Four of the LLC entities in which Manor and M1 Development have an ownership interest are facing foreclosure actions, which the bankruptcy court allowed to proceed.

In court documents, Manor says changes to the New York City building code and increases in the cost of construction materials led to unanticipated expenses. He also said the pandemic stalled construction projects, further complicating his financial situation, though both lawsuits were brought against Manor before pandemic lockdowns began.

Manor’s lawyers are now attempting to move the Realya lawsuits from state court to the federal Southern District of New York.

Manor could not be reached for comment. Representatives for Realya Investments and Realya Crown Heights LLC did not respond to requests for comment.

Correction: An earlier version of this story incorrectly identified 19 Hausman Street in Greenpoint as one of the properties that filed for bankruptcy in April. 19 Hausman Street has not filed for bankruptcy this year and is no longer connected to Rafi Manor or M1 Development.





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