Hello Living Developer lender seeks dismissal of Chapter 11 case

By Sarah Lizee

Olympia, Wash., April 14 – Hello Living Developer Nostrand LLC lender Nostrand Mezz Lender LLC is seeking dismissal of the company’s Chapter 11 case, according to a motion filed Thursday with the U.S. Bankruptcy Court for the Southern District of New York on Monday.

The debtor filed its case one day before a scheduled foreclosure sale of the lender’s collateral and the debtor’s sole asset – its ownership interests in its wholly owned subsidiary, Hello Nostrand LLC, which in turn owns a property in Brooklyn, N.Y.

Nostrand Mezz Lender said the case should be dismissed, or the court should grant relief from the automatic stay so that it can exercise its remedies under the applicable loan documents and proceed with the foreclosure sale.

The lender also said the bankruptcy was filed without legal authority, as the debtor’s operating agreement requires an independent manager to authorize a bankruptcy filing.

“The debtor’s principal seemingly commenced this Chapter 11 case unilaterally in clear violation of the debtor’s organizational documents,” the lender said in its motion.

The lender also said the case wasn’t filed in food faith, but rather to “frustrate what is a two-party dispute” that would be fully resolved by the conclusion of the foreclosure sale.

“The debtor has no income whatsoever, no material assets aside from the ownership interests, few creditors other than mezz lender, and no creditors with claims worth even a fraction of mezz lender’s claim,” the lender said.

“Indeed, this bankruptcy case is a continuation by the debtor to thwart the sale of the ownership interests.”

The lender said the debtor doesn’t have a realistic chance of using Chapter 11 to reorganize, and there is substantial, continuing diminution of the estate’s assets.

The apartment developer is based in Monsey, N.Y. The company filed Chapter 11 bankruptcy on Dec. 21 under case number 21-22696.

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