After years spent dodging debts, Benjamin Ringel may finally have run out of road.
The CEO of Armstrong Realty Management put a large multifamily complex into bankruptcy in Lakewood, New Jersey, on Friday as legal and financial problems mounted around him.
Ringel needs time to sell the Pinewood apartments at 1609-15 Monmouth Avenue before creditors, who have spent years chasing him, can put liens on the property to recoup debts. A sale of the 284-unit property to Yitzchak Scheinerman’s Rushmore Capital for $46.5 million has been pending.
Ladder Capital, Ivan Zinn’s Atalaya Capital Management and others aim to recover more than $13 million in judgments against Ringel, who acknowledged that creditors are attempting to garnish income generated by the Lakewood property.
Such liens could disrupt its sale by diverting some of its operating income to the creditors.
Ringel owes Ladder mezzanine debt secured by an Upper West Side retail condo, and Atalaya seeks repayment of debt once secured by a Hamptons mansion that Ringel owned. The 21,000-square-foot home, in Sagaponack, sold at a 2020 foreclosure sale for $11 million, an amount that was insufficient to clear Ringel’s debts.
Chapter 11 bankruptcy protection would “preserve value for the benefit of all of [the property’s] stakeholders,” Ringel told the court last week. The stakeholders include Ringel’s sister, Chana, who has waged a nearly decade-long legal battle against him that has resulted in the division of the family’s real estate portfolio.
Property owned by her brother “continues to pay his personal expenses including for expensive vacations, but not to pay his many judgment creditors,” Chana alleged in a 2021 lawsuit. The dispute stems from accusations Chana made in 2015 that Benjamin fraudulently transferred property to his wife and children, and misappropriated revenue from the Lakewood property.
The following year, Ringel, once a Democratic Party donor, was spotted at Hillary Clinton’s 2016 concession speech to Donald Trump. The New York Times reported in 2009 that he circumvented limits on campaign donations by sending checks from LLCs he controlled to Anthony Weiner, whose political career later ended in scandal.
Ringel told the bankruptcy court that the Lakewood property could fetch $47 million by the first quarter of 2024, enough to quiet creditors and his family discord. The assertion seems to be based on an offer for the property made by Rushmore Capital in 2021.
Rushmore offered to buy the apartments in Lakewood for $47 million after a New Jersey court ordered the property sold at auction to meet a settlement agreement between the Ringel siblings. However, Benjamin stymied the transaction by claiming to have outbid Rushmore at auction; the court disagreed and ordered that Rushmore be allowed to close the sale.
In the meantime, the real estate market changed dramatically. Higher interest rates have thrown some multifamily investors into distress, and financing for deals has become elusive.
By Ringel’s own calculation, “due to the changing interest rate environment…Rushmore does not have sufficient cash on hand to close and has no intention of ever closing on the sale.”
An attorney for Rushmore did not immediately return a request for comment.
Rushmore has petitioned the court to extend the date by which it must close the sale of Ringel’s apartments until after Oct. 10. If Rushmore cannot close, Ringel may be forced to find a buyer on his own, possibly at a lower price.
Chana and Benjamin Ringel bought the New Jersey property from real estate trusts belonging to their parents, David and Klara Ringel, in 2011 for $8 million in cash and lifetime annuity payments to Klara Ringel, according to bankruptcy filings.
David Ringel died in October 2008 and Klara Ringel died in June 2018.
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