Owner of tax liens moves to foreclose on UES building tied to Chaim Miller

Trust wants to jump in line of creditors involved in bankruptcy

261 East 78th Street in the Upper East Side
261 East 78th Street in the Upper East Side

A trust that bought up more than $84 million worth of delinquent property bills wants to jump to the front of the line of creditors looking to get paid from the sale of a distressed Manhattan property tied to oft-sued Brooklyn investor Chaim Miller.

The Bank of New York Mellon, acting as the agent of the trust, filed a lawsuit seeking to foreclose on the medical office building at 261 East 78th Street, according to documents filed with the Manhattan Supreme Court Wednesday.

Miller [TRDataCustom], who along with partner Sam Sprei has been sued at least 20 times in recent years by partners, formed a partnership in 2014 to co-own the building with Lee Moncho, who claims in a separate case that Miller forfeited his ownership in the property.

Moncho filed for bankruptcy last year, and the trust’s lawsuit would give it precedent over all other creditors to collect the $814,600 in liens the property owes.

Representatives for Miller and Moncho could not be immediately reached for comment.

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The trust bought 3,405 liens last year, roughly 40 percent of which were in Brooklyn and about 15 percent in Manhattan. Between 2008 and 2016, 354 of the 41,400 liens that were sold were foreclosed upon.

The liens for unpaid sewer and water bills against the six-story medical office building are now more than seven months past due since the date of the lien sale, according to the lawsuit.

Meanwhile, the property is up for sale after Moncho filed for bankruptcy in June, claiming Miller backed out of his agreements to secure new capital for the building and took out an unauthorized loan.

Moncho owes creditors more than $14 million, including $10 million to Madison Realty Capital, court papers show.

The property is on the market with Stuart Gross at Eastern Consolidated with an asking price of $18.5 million, according to the brokerage’s website. Gross could not be immediately reached for comment.