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September 22, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

U.S. Trustee and Wells Fargo question legitimacy of Monsey bankruptcy

For nearly eight years, Wells Fargo Bank has been trying to foreclose on a property owned by Jacob Hasis but has been thwarted, the bank claims, by a series of bankruptcy cases.

Now the U.S. Department of Justice regional trustee, William K. Harrington, is questioning the legitimacy of the latest bankruptcy petition, filed by Adar 26 Has LLC of Monsey.

Harrington is asking bankruptcy court in White Plains to dismiss the Chapter 11 case or convert it to a Chapter 7 liquidation “on the assertion that this case was filed in bad faith.”

“We don’t believe there is bad faith,” Adar 26’s attorney, David A. Bellon, said in an email, “when a debtor is capable of restructuring under the bankruptcy code.”

The dispute is over a property on 26th Avenue in Bayside, Queens, that Hasis mortgaged for $750,000 in 2005. The bank sued for foreclosure in 2011, but Hasis, Wells Fargo claims, has repeatedly filed bankruptcy cases to forestall collection of the debt.

Hasis petitioned for liquidation in 2012, declaring $1.8 million in assets and $4.1 million in liabilities.

He swore in an affidavit that he was unemployed and that his income was derived from 16 investment properties.

“I make no profit from these properties at this time,” he said. “The people that rent from me are basically very transient and are constantly vacating the properties, and I am forced to evict them for nonpayment.”

The bank kept pursuing foreclosure, and in 2016, Queens Supreme Court issued a default judgment. Hasis appealed, but last year, a state appellate court ruled in favor of the bank.

Hasis filed for bankruptcy last September, stopping creditors from collecting debts. The case was dismissed, according to court records, because he failed to file the required schedules and forms.

A foreclosure judgment was entered in January. In February, Hasis filed for bankruptcy, again stopping his creditors. That case also was dismissed for failure to file bankruptcy forms.

A foreclosure sale was scheduled for May 25. The day before the sale, according to the trustee, Hasis transferred ownership of the Queens property to Adar 26, based at 9 Hillel Court in Monsey.

That same day, Bellon filed Adar 26’s Chapter 11 petition in White Plains federal bankruptcy court, triggering an automatic stay that stopped the sale.

Wells Fargo is asking the court to terminate the automatic stay and grant permission to foreclose on the Queens property.

“A review of the bankruptcy filings by the debtor demonstrate,” the bank argued, “that there exists a scheme to delay, hinder and defraud.”

The trustee also alleges a pattern of delays.

Neither Bellon nor anyone representing Adar 26 attended the initial debtor interview or the initial creditors’ meeting in June, the trustee told the court. So far, Adar 26 has not filed required schedules or statements, such as a summary of assets and liabilities, the statement of financial affairs or a disclosure of Bellon’s compensation.

The trustee also alleges that the Adar 26 bankruptcy is similar to another recent case filed by Bellon for Kodosh Ventures LLC in Montebello, a few miles from Adar 26’s address.

In that case, a property in Queens was scheduled for a foreclosure sale on July 13. But the day before the sale, the property was transferred to Kodosh and the bankruptcy petition was filed, stopping the sale.

Bellon has not filed the required schedules in the Kodosh case, according to the trustee.

A hearing on the trustee’s motion in the Adar 26 case was held on Aug. 28.

“We expect to file a motion to re-argue within 30 days,” Bellon said in an email, once the court issues an order on the trustee’s motion.

As to the alleged bad faith, he added, “The DOJ just needs another witch hunt.”