The Bankruptcy Pulse OCTOBER 2025 RECAP | ANDREW R. GOTTESMAN | ROSENBERG & ESTIS, P.C.
Multiple recognizable companies filed for bankruptcy protection in October. These companies include First Brands Group Holdings, LLC (major auto-parts manufacturer); Renovo Home Partners (homeimprovement company); Razzoo’s Cajun Café (casual dining chain); Ambipar Emergency Response (operator of emergency disaster response command centers); Axia Network Foundation (digital currency and blockchain network); CandyWarehouse Inc. (a national candy retailer – ironically, filed the day before Halloween).
September 2025 saw a month-to-month increase in the number of businesses filing for Chapter 11 protection over August 2025. The 767 commercial filings in September represent a 3% increase over the September 20241. Although all these companies may not have a direct impact on our clients’ businesses, it is a trend worth watching. Below is more detailed information on cases directly affecting the New York City real estate market that either filed for protection in October or had actionable news last month.
Broadway Realty I Co., LLC (Pinnacle Group) In May, Broadway Realty I Co., LLC, a portfolio company affiliated with Joel Weiner’s Pinnacle Group filed cases that could set precedent for how similar multifamily portfolios, with largely rent protected inventory, navigate financial distress in a highinterest-rate environment for protection. In all, there are 82 debtors with cases being jointly administered in the Southern District of New York Bankruptcy Court under case number 25-11050. The debtors collectively own approximately 5,200 residential units in 93 properties located across four of New York City’s boroughs: Manhattan, Brooklyn,
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the Bronx, and Queens. Substantially all the Debtors’ tenants are entitled to statutory rent protection. All the portfolio properties are encumbered by approximately $564 million of aggregate mortgage debt, all with Flagstar Bank N.A. The companies cited a combination of rising interest rates, rising inflation, lower rent collection and the inability to convert rent protected units to higher rents or condominiums after the 2019 TPA’s enactment for reduced protected revenue and the inability service their debt. This shortfall led Flagstar to seek foreclosure and the appointment of a receiver over 21 properties in the portfolio. Faced with the imminent risk of receivership over significant assets in their property portfolio, the debtors filed a defensive chapter 11 filing to preserve their enterprise value. On October 1st, the court entered an order approving procedures which allow the companies to solicit bids for the sale and/or refinance of the properties.
Bids are allowed on individual properties, on the entire portfolio, or in in any combination. This order also allows the debtors to provide bid protection to “stalking horse” bidders and conduct one or more public auctions. November 21, 2025, is the deadline for initial indications of interest is and December 12, 2025, is the deadline to submit binding bids. A copy of the order may be found here. On October 27, 2025, the debtors filed a motion to approve a disclosure statement that would allow the solicitation of a plan funded by the sale or refinance of properties subject to the bid procedures. The motion envisions solicitation of a plan by the first week in December and confirmation by midJanuary 2026. Despite assertions that the properties are worth well in excess of the mortgage debt, the proposed plan and disclosure statement indicate that general unsecured creditors are unlikely to receive a distribution. The motion may be found here.
LuxUrban LuxUrban, the former operator of over 1000 New York City hotel rooms, filed for Chapter 11 bankruptcy protection in September 2025, initially hoping to restructure and continue operations as a private company. However, the Office of the United States Trustee filed an emergency motion seeking the appointment of a Chapter 11 trustee to oversee LuxUrban’s restructuring, just over a month after the case was filed. The US Trustee cited “gross negligence” by the company’s management and accused the company of continuing to book hotel rooms after the hotels ceased operations, stranding travelers. Aareal Capital Corp., one of the company’s lenders, joined the government motion and sought to convert the case to a liquidation under Chapter 7 of the Bankruptcy Code. Among other things, Aareal claimed mounting public safety and security concerns as the basis for conversion. Ultimately, the LuxUrban consented to conversion. On October 21st, Judge David
Jones sitting in the Southern District of New York Bankruptcy Court converted the case to a Chapter 7 liquidation and appointed Kenneth Silverman as the interim trustee. Silverman will liquidate the company’s assets and investigate various potential claims stemming from the actions of management prior to the company’s filing. A copy of the order may be found here.
R&E’s Head of Bankruptcy & Reorganization, Andrew Gottesman, was quoted in a recent Bisnow article regarding LuxUrban case.
How to protect yourself R&E frequently represents property owners, landlords, lenders, and other parties in major and middle market bankruptcies across various industries. R&E uses its cross platform Distressed Debt Team to assess risks, protect rights, and formulate strategies for recovery and liquidity concerns. R&E also regularly works with businesses concerned about the present and potential future impact of the unique challenges faced in the current economic and political climate. With the dawn of a new administration, now would be a suitable time for you to conduct a review of any contract, loan, and/or security agreements with any potentially troubled counterparties. Feel free to contact your contact at R&E or Andrew Gottesman, Member & Head of the firm’s Bankruptcy & Reorganization Department, to assess your rights and to assist with strategies to best serve your goals. Andrew R. Gottesman: agottesman@rosenbergestis.com | (212) 551-2070