The owner of what was once “Le Penthouse,” the luxury Madison Avenue condominium that listed in 2019 for $98 million, filed for bankruptcy on Tuesday to halt a foreclosure sale.
The 19,815-square-foot residence located in a high-rise building at 172 Madison Ave. was subsequently turned into five separate condo penthouses that will be marketed for sale in the Chapter 11 proceeding, said Jonathan Pasternak, a lawyer representing owner Madison 33 Partners.
The company owns five other residential condos and two ground-floor commercial units that will also be marketed, Pasternak said. The total value of the condos is about $100 million, according to Madison 33 Partners’ bankruptcy petition. The company’s owners include real estate developer Yitzchak Tessler.
Madison 33 Partners filed Chapter 11 on Tuesday in order to prevent an affiliate of private equity firm ARC PE from foreclosing. ARC affiliate Palm Avenue Hialeah Trust is owed about $62.6 million, according to the bankruptcy petition.
ARC Managing Partner John Olsen said in an email that Palm Avenue Hialeah Trust “intends to fight this bad faith filing vigorously!”
Companies facing foreclosure often file Chapter 11 to halt a potential sale. Madison 33 Partners believes the condos are valuable enough to more than pay off the debt, Pasternak said.
Quick process
“We will move forward with a quick marketing and sale process to pay everyone back,” he said in an interview.
The former Le Penthouse joins a handful of notable properties that have been connected to bankruptcy in recent years. In 2021, a Los Angeles mega mansion called “The One” filed Chapter 11 to halt foreclosure. The One had been marketed for as much as $500 million but was sold in bankruptcy for $141 million.
Last year, natural gas tycoon Charif Souki put his sprawling Colorado ranch into Chapter 11 amid a fight with lenders. A fund managed by UBS O’Connor LLC and other creditors later acquired the ranch for $30.5 million.
Jonathan Randles, Bloomberg , 2024-06-05 12:03:04
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