Brooklyn Developer All Year Management Defaults Again, Will Be Delisted in Israel
In another blow to Brooklyn developer All Year Management, Downtown Capital Partners is demanding that the company immediately pay off $66 million in accrued debt on a Gowanus development site, one of a string of defaults the company is facing, according to documents filed with the Tel Aviv Stock Exchange.
All Year is also scheduled to be delisted from the TASE on Jan. 3, after pausing bond payments and failing to publish its third-quarter reports, making Dec. 31 the last day of trading on its four outstanding bonds. As a result, its bonds are trading below 20 cents on the dollar.
The Downtown Capital default is over a $35 million preferred equity loan for 459 Smith Street in Gowanus that the lender extended to All Year in 2019. Downtown Capital has been in negotiations with All Year since it missed a $280,000 preferred capital return payment in August. In early December, Downtown Capital had sent notice to All Year arguing that, due to several violations under the terms of their deal, the lender could exercise a variety of options, such as triggering a higher interest rate, exercising a put option, or beginning the process to take over the properties.
Downtown Capital is now demanding immediate repayment on the loan, which has grown to $66 million, including accrued interest and other claims, per the documents.
Downtown is also the senior lender on the property, having extended a $55 million loan in 2019. It has also begun the default process on that loan, and sent an acceleration notice to the company in November, asking for $60 million.
This follows defaults on both the senior and mezzanine loans on a portion of its newly developed Bushwick rental Denizen Bushwick. In that case, the mezzanine interest is scheduled for a Uniform Commercial Code (UCC) foreclosure auction in early February, while the senior lender, JPMorgan Chase (JPM), has sent notice of default but has not yet pursued further options.
After a bondholder meeting on Dec. 30, All Year announced several moves to help restructure its portfolio. The company appointed Yoel Biran as chief restructuring officer, and Efraim Diamond as associate restructuring officer, moves that encouraged Israeli bondholders, according to messages shared on social media.