350 East 52nd Street (Getty, StreetEasy)
The Turtle Bay apartment has long been a battleground for landlord William Keppel. He is now forced to file for bankruptcy.
Keppel, which is in the middle of an ugly legal battle with his family over another portfolio of multifamily homes, is seeking Chapter 11 bankruptcy protection to fend off a foreclosure at 350 East 52nd Street. The application is against Eastgate White House, a Keppel-affiliated entity that manages 138 apartments known as Eastgate Houses.
In May, the Wilmington Trust filed for foreclosure on Keppel’s $32.1 million mortgage issued by Barclays and transferred to Wilmington in 2018. Keppel has not made monthly payments on the loan since August 6, 2021, according to court documents.
Lenders also accuse landlords of improperly using income from the property to pay for unrelated expenses such as car leases and meals. Filed as trustee on behalf of holders of Wells Fargo Securities representing shares. The foreclosure action has been stayed by the bankruptcy filing.
Koeppel’s attorneys have accused an attempted foreclosure and an ongoing class action lawsuit by the building’s tenants as the cause of the bankruptcy filing. A 2011 lawsuit alleged that Keppel overcharged rent while receiving the J-51 property tax cut.
Last year, a judge ruled in favor of the tenant, lowering the rent. Keppel is appealing the decision, blaming his mother Roberta, who previously managed the building, for applying for tax breaks.
“This is an example of the victims my mother left behind.”
He claims he is not responsible for overcharging rent due to a 2008 settlement agreement involving Roberta. As part of the agreement, Keppel took over control of Eastgate House by her family, but requested that her mother “keep” a trust overseeing it. [Whitehouse Eastgate] Harmless to “rent having to be returned to tenants due to overcharge before closing”.
Koeppel said the provision was made because of a pending lawsuit against Tishman Speyer alleging overcharges for rent in Stuyvesant Town. A 2009 decision in that pivotal lawsuit, which decided that apartments could not be deregulated while properties benefited from J-51, sparked a wave of overbilling lawsuits.
Koeppel claims that the 2008 agreement has not been honored.
“Roberta Koeppel has taken the J-51 tax relief, which has resulted in the depletion of available resources to properly maintain the building,” he said in a statement. “This is another example of Roberta’s mismanagement and the victim left by her mother.”
The bankruptcy filing estimates the liabilities and assets of the Eastgate White House at between $10 million and $50 million, citing a mortgage as the largest outstanding claim by creditors. . Also listed are his $3.4 million loan from William Keppel and his $2 million loan from another entity related to the landlord, which were used to pay the mortgage on the property. rice field.
This is not the first time Koeppel has filed for bankruptcy. He personally sought protection under Chapter 11 in his 2018. Around the same time, he challenged his Solil Management’s attempt to terminate his triple net lease on the East 52nd Street property. Sorill claimed that Keppel violated the terms of the lease by failing to resolve the sprinkler and sidewalk violations. The dispute was then resolved.
The apartment building is separate from the trust that manages the other 13 properties Keppel plans to inherit. He is suing to replace his mother and sister as trustees overseeing those properties, claiming he allowed the building to fall into disrepair.
He recently claimed that some fraudulent payments were made from the trust and could be responsible for hefty taxes and fines.