Chapter 11 filing stalls auction of prime Madison Avenue development site

CIM holds note on property

CIM's Avi Shemesh and the Madison Avenue site
CIM's Avi Shemesh and the Madison Avenue site

Real estate investment giant CIM will have to wait a little longer to wrest control of a mixed-use development site in Murray Hill now that the property’s owner has filed for bankruptcy, according to court documents obtained by The Real Deal.

Russian developer Natalia Pirogova’s NMP-Group has filed for Chapter 11 protection to prevent the parcel from hitting the foreclosure auction block, which it had been slated to do this week. California-based CIM now has to wait for a judge to grant permission for the property to be auctioned before it can proceed with any plans for the site, at 172-176 Madison Avenue and 21 East 33rd Street.

NMP has has outstanding debt of close to $52 million relating to the property and filed for permission to reorganize Wednesday, according to the documents. A spokesperson for NMP did not immediately respond to a request for comment. CIM declined to comment.

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In its bankruptcy declaration, NMP appealed to the court to allow the company to preserve its ownership of the property and proceed with a contract for sale “in an orderly fashion.” The company placed a value on the site of approximately $68 million.

Pirogova purchased the corner site, then home to an office building, for $21.4 million in 2007, The Real Deal previously reported, and had plans to build a mixed-use property with residential and retail components. The site is primed for a tower of up to 100,000 square feet based on its zoning designation, according to data from PropertyShark.

CIM acquired $29 million in debt on the property from Garrison Investment Group in 2011. Pirogova later sued the 432 Park Avenue developer for allegedly using privileged information to buy the debt. She claimed that CIM had posed as a prospective partner for NMP before going behind her back and buying the note.