Scrambling to save their Bronx residential development, Toby Moskovits and Michael Lichtenstein say they got up to $ 14 million to buy it out of bankruptcy. But the lender and the restructuring team for the 286 Rider Avenue project may need to be convinced.

In court records, a lawyer fighting the pair calls their financing offer – backed by a heavily redacted letter from the anonymous Moskovits investor – a “Rube Goldberg contraption.” A lawyer for the lender, Be-Aviv, calls it “full of uncertainties and loopholes”.

Moskovits and Lichtenstein, executives of Heritage Equity Partners, are counting on the courts to give their bailout a chance.

Whoever ends up owning the property will take possession of 21,000 square feet of land in a booming neighborhood, with easy access to trains 4, 5 and 6. A one-story warehouse remains, but Heritage has filed claims. demolition plans and administrative documents for an apartment building with 105 units.

Meanwhile, the bankruptcy restructuring team hired Rosewood Realty Group, a commercial brokerage firm, which began to market the undeveloped property at auction.

Last week, the Heritage co-founders submitted a letter from an investor pledging up to $ 14 million to repay Be-Aviv and end the bankruptcy process. The investor claimed to have worked with Moskovits and Lichtenstein since 2017, and attached letters from the Brickyard Bank of Chicago and the Canadian Imperial Bank of Commerce to demonstrate sufficient liquidity.

But the investor’s name, company, past investments in heritage projects and contact details have all been redacted.

With no way to verify the claims and no binding commitment, the other parties pleaded with the court to reject the plan. A Be Aviv lawyer complained that Heritage “will not even identify its intended lender let alone the terms of the exit refinancing,” while a US trustee overseeing the bankruptcy called the motion “at best. premature ”.

“The lender would like nothing better than to be paid back in full,” wrote Joseph Moldovan, another lawyer from Be-Aviv, in his response to Heritage’s offer. But “as they say in Texas, this dog will not hunt,” he wrote.

For their part, the co-founders of Heritage say they are ready to share unredacted copies with other parties if they sign a confidentiality agreement. (In their file, they say they disclosed the information to the bankruptcy trustee. He declined to comment.)

The developers are afraid to reveal the information because they suspect that Be-Aviv or the restructuring team could try to undermine the funding before it closes. According to Moskovits and his team, the sabotage is already underway.

Rosewood plans to close the auction on the property on Jan. 7 and auction it off on Jan. 14, according to Greg Corbin, president of bankruptcy and restructuring at Rosewood. Although the court recently approved a temporary financing plan to sell the property at auction by January 15, it did not approve bidding procedures, which would block auction dates.

Moskovits’ side argues that the marketing of the sale stifles their chances of raising funds to come out of bankruptcy without an auction. But an expert not involved in the case said marketing shouldn’t be an issue.

“I can understand why lawyers might be worried, but I don’t know if this is a big deal,” said Stephen Starr, lawyer for Starr & Starr specializing in bankruptcy and corporate restructuring.

It is not uncommon for a debtor to claim access to finance to start an auction. Funding for Heritage is apparently contingent on a final judge’s order and the release of the Be-Aviv lien and a new first-position lien on the property to the mysterious savior.

Heritage and Be-Aviv have been battling since their multi-stage financing plan for two developments collapsed. Be-Aviv declared an $ 8 million land loan for the Rider Avenue project in default in March and took control of the LLC property soon after, filing for bankruptcy in July. Heritage is appealing the authorization of the bankruptcy court.

After nine months, both sides are considering an exit – one via a new investor, the other via the block auction. “Despite all the vitriol, acrimony and the bewildering number of petitions and objections that have been filed,” wrote Moldovan, the lawyer for Be-Aviv, “it’s really not, or maybe more. exactly, shouldn’t be a complicated matter. “

This could be wishful thinking, and not the only example.