Nussbaum Lowinger Files for Chapter 11 Bankruptcy

Mark Nussbaum’s former law firms filed for Chapter 11 bankruptcy months after the once prominent real estate lawyer admitted to diverting hundreds of millions of dollars to Brooklyn investor Mendel Steiner.

A chief restructuring officer put Nussbaum Lowinger and Mark J Nussbaum & Associates into bankruptcy in federal court in New York’s Southern District on Thursday, halting an ongoing alternative to bankruptcy proceedings in New York state court, known as an ABC. A lawyer handling the ABC has already said it is planning to contest the bankruptcy.

Nussbaum’s former law firms listed between $100 million and $500 million in liabilities and $10 million to $50 million in assets, according to the bankruptcy filing.

Nussbaum Lowinger, Nussbaum’s primary law firm, listed its largest creditors as Elizabeth Capital Success LLC with a $156.3 million claim and Blueberry Funding, with a $58.7 million claim. Murray Huberfeld, co-founder of the now-defunct hedge fund Platinum Partners, and his entities are owed $17 million, according to bankruptcy filings.

Bloomberg Law first reported news of the bankruptcy.

Nussbaum Lowinger’s bankruptcy adds another layer to the legal mess surrounding Mark Nussbaum.

The disgraced lawyer is facing criminal charges from the Manhattan District Attorney’s office for grand larceny for allegedly diverting $15 million in client escrow money. Nussbaum has pleaded not guilty. In addition to criminal charges, Nussbaum is facing a litany of civil lawsuits, to which a bankruptcy would halt. (Despite his not guilty plea in criminal court, Nussbaum admitted to funneling funds during these civil proceedings.) Notably, a bankruptcy would also pause Nussbaum’s ABC, an alternative to bankruptcy court proceedings.

Nussbaum appointed a lawyer, known as an assignee, to begin the ABC proceedings in June 2025. The lawyer, Sheldon Eisenberger, has attempted to collect on Nussbaum’s law firm’s outstanding debts to repay its creditors. During that process, Nussbaum revealed more insight into how his law firm ran into trouble. In one court filing, Nussbaum admitted to diverting $336 million from his law firm’s creditors to Steiner between 2022 and 2025.

But Nussbaum Lowinger’s new chief restructuring officer, Ephraim Diamond, claims the ABC has made minimal progress and few distributions to creditors. A bankruptcy court would expedite and centralize that process.

Eisenberger already announced plans to contest the bankruptcy. After the bankruptcy was filed, Eisenberger sent a letter to creditors alerting them that “Mark Nussbaum caused the unauthorized filing” of the bankruptcy petitions.

“The petitions are without basis, and we will seek their dismissal along with all other appropriate relief, including legal fees, costs and sanction,” the letter said, which was filed as part of the ABC proceedings in NY state court.

Nussbaum used his firm’s escrow accounts as a way to facilitate short-term loans to real estate dealmakers. He became well known for a move called “show capital,” where Nussbaum would provide a dealmaker with the necessary funds to show another party the dealmaker had the funds to close on the deal.

But Nussbaum ran into a deficit in 2024, with much of the money going to Steiner. In January 2025, a nursing home investor named Jacob Sod filed a lawsuit against Nussbaum and his law firms, alleging they had refused to return him $15 million of escrow funds. Steiner died by suicide in a Manhattan hotel room days later. Days after that Nussbaum shut down Nussbaum Lowinger.