Filing Alert: ZRG Chapter 11

ZRG, Inc. ("ZRG" or the "Debtor"), a Brooklyn, NY-based corporation which owns and manages commercial real estate through its subsidiaries, filed for Chapter 11 protection on Jan. 29 in the U.S. Bankruptcy Court for the Eastern District of New York, Brooklyn Division.

ZRG owns 100% of the membership interests in two limited liability companies: 90 Nassau Street LLC and 385 Greenwich Street LLC (the "Property Owners"). These entities collectively own properties at 90 Nassau Street and 385 Greenwich Street, New York, NY.

• The properties are encumbered by a consolidated mortgage lien securing an original principal loan of $17 million, currently held by Ladder CRE Finance REIT, Inc (the "Lender").
• The loan is also secured by an Article 9 equity pledge granted by ZRG to the Lender.
• The loan fell into default, and rather than a conventional foreclosure, the lender pursued a UCC Article 9 foreclosure sale scheduled for January 30, 2025.

Although the Debtor and the Property Owners are actively seeking potential buyers for each building, they were not yet ready to close, and the lender refused to adjourn the scheduled foreclosure sale. As a result, to "preserve the status quo" and "maximize the value of the properties", ZRG elected to seek Chapter 11 relief with the intention of subsequently commencing Chapter 11 cases on behalf of the Property Owners. This strategy is aimed at enabling the Debtor and the Property Owners to conduct a bankruptcy auction or refinancing, rather than face a forced foreclosure sale.

The company reports $10 million to $50 million in both assets and liabilities. The filing indicates that there will be funds available for distribution to unsecured creditors. The case number is 25-40464.

Key Parties

• Counsel:
  • Name: Kevin Nash
  • Firm: Goldberg Weprin Finkel Goldstein LLP
  • Email: knash@gwfglaw.com
• Signatories:
  • Name: Zachary Gindi
  • Title: Authorized Signatory
• Equity Security Holders:
  • Randal Gindi (50%)
  • Zachary Gindi (50%)

Bondoro Insights is continuing to monitor this case and will provide further coverage as appropriate.

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