FMB Development apartment project in Van Nuys declares bankruptcy

It started with a plan, and ended in bankruptcy. 

After FMB Development defaulted on a loan tied to an apartment project in Van Nuys last month, the firm has opted to file for bankruptcy on the development. 

An entity controlled by Ilan Kelig’s FMB filed for Chapter 11 protection to resolve debt tied to a 180-unit complex at 7111 North Sepulveda Boulevard, according to a bankruptcy petition. Kelig did not respond to a request for comment. 

The project has between $10 million and $50 million in liabilities, according to the petition, and between $1 million and $10 million in assets. 

FMB has owned the land since 2018, when it paid $9.5 million for the roughly 1-acre site, according to property records. It planned a six-story apartment building with ground-floor retail. 

In 2021, FMB scored three loans for the project — $2 million in debt from three individuals, Heng Li, Jie Li and Ning Jiang; $2.6 million from Tel Aviv-based entity Marom Kislev Two; and $8 million from Lone Oak Fund. But construction never seemed to start. 

By August, FMB had defaulted on all three loans, owing a total of $15 million to the lenders, according to default notices filed with L.A. County. 

FMB listed all three lender groups as creditors in its bankruptcy filing. It also lists RTI Properties, a hard money lender in Los Angeles, as a creditor with a roughly $2.5 million claim.

The Van Nuys project is not the only one FMB has defaulted on. 

Last month, a notice of default was filed on FMB’s apartment development at 1317 South Hope Street in Downtown L.A., records show.