Edited by: TJVNews.com
Like many businesses that have been negatively impacted by the economic downturn caused by the Covid pandemic, it appears that the real estate industry has also taken a big hit.
On Tuesday, it was reported that the Brooklyn based All Year Holdings Ltd., a powerful development firm, has filed for bankruptcy, largely because it was not allowed to collect rent from hundreds of tenants, as a result of government rules which have been extremely tough on landlords, according to a report on the VIN web site.
The real estate firm owned by renowned property developer Yoel Goldman appeared close to finding a buyer to restructure most of its $1.6 billion in debt, but had no choice other than to file for Chapter 11 bankruptcy, according to a report on the Real Deal web site.
VIN reported that the company owns 1,648 residential units and 69 commercial units in Brooklyn worth over $1 billion. The Real Deal reported the company has $1.17 billion in assets, according to the filing and has about $1.6 billion in outstanding debt, consisting of $800 million in bonds issued in Israel and about $760 million in property-level mortgage debt. VIN reported that its most valuable asset is the William Vale Hotel in Williamsburg.
The filing in Manhattan federal court came a day after the company discovered a $37.8 million confession of judgment was entered by Yoel Goldman, without the approval of All Year’s board, as was reported by the Real Deal. The board could also not reach an agreement with Goldman over his ability to make decisions for the firm, which the filing said could lead to insolvency.
“All Year Holdings has been engaged in a robust process to maximize the value of its real estate portfolio, which is continuing to advance with the support of bondholders. Led by All Year’s restructuring officers, this process has already garnered substantial interest from third-party investors and follows the recent successful sale of the Denizen luxury rental complex in Bushwick for $506 million in cash. To further advance and ultimately effectuate a value-maximizing transaction, All Year initiated a voluntary Chapter 11 proceeding on December 14 with the support of its bondholders. All Year continues to maintain ample liquidity to manage its ongoing operational needs and the needs of its subsidiary properties, including paying mortgage and related property expenses in a timely manner. All Year remains focused on driving the process to conclusion as swiftly as possible for the benefit of its stakeholders.”, a spokesperson for All Year told TJV NEWS.
All Year CEO Assaf Ravid said, “Like many real estate businesses, the parent debtor struggled to service its significant debt burden as its revenues, derived primarily from residential and commercial rental income streams, were adversely impacted by the ongoing COVID-19 pandemic.”
All Year was close to finalizing a deal to restructure most of its bonds with Israeli investors, according to the Real Deal report. Josh Gotlib’s Black Spruce Management made a bid this summer to assume the debt and take control of 125 All Year properties, but that deal fell through and a joint venture led by Andrew Farkas now appears to be the front-runner.
VIN reported that Israeli creditors were threatening to take immediate action, which made the bankruptcy filing necessary to avoid irreparable damage.