ERBO debtor’s case should be dismissed or converted, trustee says

By Sarah Lizee

Olympia, Wash., Aug. 24 – ERBO Properties LLC debtor Gold Mezz LLC should have its Chapter 11 bankruptcy case dismissed or converted, Region 2 U.S. trustee William K. Harrington said in a motion filed Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.

Harrington said that after the membership interests in Kova 521 LLC, the debtor’s only scheduled asset, was foreclosed and transferred to 541 W 21 SME LLC, the Gold Mezz estate does not appear to have any assets left to be maximized in value or administered in bankruptcy.

Gold Mezz is a holding company created for the purpose of mezzanine financing. It doesn’t have an ongoing business operation, doesn’t have employees, and appears to have generated no revenue, the U.S. trustee said.

“Having Gold Mezz remain in Chapter 11 necessarily incurs a series of costs, such as legal fees and U.S. trustee quarterly fees,” Harrington said in the motion.

“KOVA and ERBO are now under new management and have retained new counsel who is guiding ERBO’s bankruptcy case.

“It does not appear necessary or proper for Gold Mezz to remain in Chapter 11, and thus dismissal is warranted.”

The New York-based property owner filed bankruptcy on Feb. 13, 2023 under Chapter 11 case number 23-10210.

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