Lawyer lashes out at Mark Nussbaum’s Bankruptcy

The dissolution of Mark Nussbaum’s former law firm Nussbaum Lowinger somehow keeps getting uglier.

Sheldon Eisenberger, the attorney overseeing Nussbaum Lowinger’s wind down since last June is firing shots at Nussbaum, his personal lawyer, and a restructuring officer, about two weeks after the firm filed for Chapter 11 bankruptcy in New York’s Southern District.

The bankruptcy was seen by Nussbaum’s side as a way to expedite distributions to Nussbaum Lowinger’s creditors, after the alternative to the bankruptcy process overseen by Eisenberger was deemed to be moving too slow. The move irked Eisenberger, who had an increasingly strained relationship with Nussbaum and recently launched a lawsuit against Nussbaum’s personal attorney.

Eisenberger claims the bankruptcy is nothing more than a last ditch effort by Nussbaum to evade state court proceedings.

“I believe it is clear that proceeding further with this bankruptcy case may well allow the debtors’ principal the disgraced former attorney and admitted Ponzi schemer Mark Nussbaum to continue to defraud his creditors and to hide assets that rightfully belong to those creditors,” said Eisenberger in a new court filing.

Eisenberger’s response to Nussbaum’s bankruptcy petitions go beyond procedural motions. His filings reveal previously undisclosed details about Nussbaum’s alleged criminal proceedings.

Nussbaum allegedly had extensive pre-indictment plea talks with the U.S. Department of Justice and is facing imminent federal criminal charges, according to Eisenberger. Eisenberger further claims Nussbaum conducted mortgage fraud against various lenders on a massive scale in addition to escrow fraud.

Nussbaum’s criminal attorney Zach Intrater did not return a request to comment.

Nussbaum Lowinger’s bankruptcy lays bare the tension between Nussbaum, the once hot shot real estate lawyer, and Eisenberger, a commercial litigator at Anderson Killer with decades of experience. Eisenberger, though ultimately appointed by Nussbaum, does not work for or get paid by Nussbaum. His job is to act as a fiduciary to commence litigation to repay creditors of Nussbaum’s estate.

Creditors made up of former Nussbaum Lowinger clients, largely in the Orthodox Jewish community in New Jersey and New York, are owed over $400 million from Nussbaum’s former law firms.

So far, Eisenberger’s efforts have produced minimal results. The lawyer and his team are still tracing exactly where all the money went. Nussbaum admitted in a court filing to diverting $336 million from his law firms to his deal partner Mendel Steiner and his family. But Steiner died in early 2025, and collecting on his estate’s assets has proved challenging. Nussbaum’s bankruptcy now halts the ABC process.

Nussbaum was known as the ultimate fixer. He used his law firm’s escrow accounts to offer bridge loans to real estate dealmakers. By early 2025, Nussbaum Lowinger clients alleged he refused to return escrow money. Nussbaum closed his firm. After examining his options, Nussbaum ultimately agreed to an ABC, a process that is much more opaque than bankruptcy.

Eisenberger claims he’s made progress on settlements to return funds to creditors. He has commenced litigation against people who allegedly owed Nussbaum money such as nursing home entrepreneur Tzali Chopp.

But Eisenberger alleges the collection process took a detour earlier this year when he discovered that Nussbaum had turned over assets to preferred creditors via the escrow account of his civil attorney Ethan Kobre.

On March 19, Eisenberger initiated a lawsuit against Kobre. Eisenberger claims Kobre responded angrily, threatening legal action against Eisenberger and his law firm. Two founding partners of Kobre’s law firm Schwartz Sladkus Reich Greenberg and Atlas, pleaded with Eisenberger’s attorneys to discontinue the lawsuit, so they could address the issues raised, according to Eisenberger.

Two weeks later on April 16, Mark J Nussbaum & Associates and Nussbaum Lowinger, were put into bankruptcy. Ephraim Diamond was hired as the bankruptcy’s chief restructuring officer.

“This sequence of events – along with the absence of any legitimate bankruptcy purpose to these petitions makes it evident that the effect of this bankruptcy proceeding is to frustrate and halt my efforts to hold Nussbaum and Kobre to account for diverting estate assets and thereby continuing to defraud the debtors’ creditors,” said Eisenberger in a declaration.

A spokesperson for the debtor said, “Any allegation or insinuation that Mr. Kobre acted improperly is patently false. The truth will be laid bare in the debtors’ response.”

Kobre is not Eisenberger’s only target. He then turned his ire to Diamond, the restructuring officer of Nussbaum Lowinger’s bankruptcy, claiming that he is biased because he is the first cousin of Samuel Lowinger, Nussbaum’s ex-law partner.

Eisenberger alleges Diamond minimized Nussbaum’s crimes in his declaration provided as part of the bankruptcy. In his declaration, Diamond described Nussbaum Lowinger as branching out from the practice of law into hard money lending, liquidity enhancement loans, and short-terms bridge loans.

“In a very limited and overly literal sense, this statement by Mr. Diamond is partially true. But the statement is ‘true’ only in the same sense as, for example, saying that Bernard Madoff ran an asset management firm,” said Eisenberger.

In reality, Eisenberger said, Nussbaum ran a multi-hundred million dollar Ponzi scheme by redirecting money out of Nussbaum Lowinger’s escrow accounts to Steiner and others.

“Mr. Nussbaum has freely acknowledged that he committed fraud, and that as a result he expects that he will soon be going to prison for many years,” said Eisenberger.

The central question for Eisenberger is whether he has the legal authority to challenge Nussbaum’s bankruptcies.

Eisenberger claims Nussbaum does not have the authority to throw his defunct law firms into bankruptcy, citing New York law. Yet, Diamond claims the ABC assignment can be terminated.

Creditors face another pressing question. Which option is better? The ABC has been a slow process, in part because of delays in the state court. But progress has been ongoing for about ten months and Eisenberger has a default judgment for $336 million against two companies formerly controlled by Steiner. (Although Eisenberger has not collected on that judgment).

On the flip side, bankruptcy could consolidate all the cases into one case and one judge. In bankruptcy, a debtor is supposed to open their books. Thus the public and creditors will have more insight into Nussbaum Lowinger’s opaque financial dealings, something Nussbaum likely initially sought to avoid.

The bankruptcies will not stop the criminal proceedings against Nussbaum. The disgraced lawyer is facing charges from the Manhattan District Attorney’s office for grand larceny for allegedly diverting over $15 million in client escrow money. Nussbaum has pleaded not guilty.